News & Events –

In its annual priorities report, the SEC Examinations Division focused on areas of “heightened risk to investors, registrants and the markets.” The priorities list serves as both a reflection of new and evolving threats, and as a reminder for firms to address compliance gaps or deficiencies the Division observed over the past fiscal year. In this article, Bates reviews the report in detail as we adapt our own annual summary Chart to track the SEC's evolving priorities.

In a recent article assessing the regulatory horizon for cryptocurrency, Bates identified several areas of uncertainty which raised certain questions. We may now have answers to those questions in the form of an Executive Order and accompanying Fact Sheet on “ensuring responsible development of digital assets,” issued by President Biden on March 9, 2022. Here is an overview of the main points.  

The SEC Division of Examinations has just released its 2022 examination priorities report, focusing on Private Funds, ESG Investing, Standards of Conduct (including Regulation Best Interest, Fiduciary Duty, and Form CRS), Information Security and Operational Resiliency, and Emerging Technologies and Crypto-Assets. Stay tuned for our annual commentary, coming soon.

As cryptocurrency becomes more mainstream, many people are looking to learn more, including bankers and regulators. Financial institutions are also currently trying to determine how to integrate cryptocurrency into the traditional banking and investment worlds. Read the full article from Managing Director Brandi B. Reynolds and Consulting Expert Paul Nelson to learn about five common cryptocurrency misconceptions and how Bates can help your firm.

A determined litigant is hoping to define, or redefine, a type of cryptocurrency through a lawsuit against the Internal Revenue Service. The cryptocurrency involved is Tezos, one of several cryptocurrencies that rely on “proof of stake” as the validation method for additions to a blockchain. This matter is significant, as Tezos has a unit value of about $4 and a market value of about $8 billion. Tezos is one of the currencies available for use in smart contracts—self executing contracts where the parties can verify performance without an intermediary. Learn more about how this suit may redefine Cryptocurrency for tax purposes in this article authored by Bates consulting expert Paul Nelson.

Determining if you are a money transmitter and then navigating the licensing requirements can be a daunting task. This guide is meant to ease the pain of that process with some helpful tips as well as great resources. We'll take a look at who needs a money transmitter license, what the licensing process involves, and other helpful resources.

On January 1, 2021, the Anti-Money Laundering Act ("AMLA") became law. The far-reaching legislation expanded the Bank Secrecy Act regulatory framework by, among other things, establishing a beneficial non-public ownership database and reporting requirements under AMLA’s Corporate Transparency Act; promoting technology and other innovation to support enforcement, particularly concerning SARs; expanding enforcement authority over art, antiquities and real estate; and increasing penalties for AML violations. The story of FinCEN’s regulatory efforts since the passage of AMLA is the story of the agency working to effectuate those mandates. In this post, Bates looks at where we are in that story with the following regulatory developments.

Issued on February 9th, 2022, the FINRA 2022 Exam and Risk Monitoring Report highlights several new areas of FINRA focus that back up the regulator's current theme of protection of retail investors, including, for example, first-time attention to FINRA rules on trusted contacts, funding portals and crowdfunding offerings. Bates reviews those new topics and the selected highlights as we adapt our own annual summary Chart to better reflect the changing FINRA approach.

In 2021, the market for cryptocurrencies nearly tripled to more than $2 trillion. Recent movement toward some framework over cryptocurrency seeks to balance supporting innovation while reducing risk, but the speed and size of the complex and evolving market is creating urgency. It is now clear that all the players across the executive and legislative landscape are engaged. Here’s a brief update on the latest developments.

In a SIFMA “One-on-One” virtual event sponsored by Bates Group, FINRA CEO Robert Cook sat down with SIFMA President Ken Bentson to discuss FINRA priorities for 2022. The conversation offered a first glimpse at the issues to be covered in the self-regulatory organization’s Annual Exam and Risk Monitoring Report, due out in the next few weeks.

Just before Christmas, the SEC issued new guidance on compliance with the broker-dealer/investment adviser-mandated Client Relationship Summary Form (“Form CRS”). The release provides significant detail on disclosure topics as well as the content, format and posting requirements for the Form. In this article, we review the latest highlighted concerns and key takeaways.

Get the top takeaways to help you deconstruct the SEC's 400-plus-page adopting release of the new Marketing (and Solicitor) Rule. Read this helpful summary from Bates Compliance’s recent Webinar featuring Managing Directors and leading Compliance Consultants Linda Shirkey and Rhonda Lear Davis, CAMS, CFE. Learn about key provisions and practical ways to conform oversight, recordkeeping and disclosure requirements under the rule.

How SEC Regulation Best Interest (“Reg BI”) became the prevailing federal standard for broker-dealer investment recommendations to clients is a long and complicated story. However, as of its June 30th, 2020 implementation date, Reg BI is the rule, which means that compliance with the rule’s requirements is mandatory and enforceable. In an unpleasant surprise for regulators and rule advocates, results from a recent NASAA reexamination initiative conclude that “broker-dealer firms still are not abiding by the Reg BI rule now in effect.” The report was greeted with strong industry reaction. In this article, Bates takes a look at what NASAA found and how it is being received.

Government entities have begun in earnest to address concerns over the rapidly expanding crypto marketplace. Congress has passed the Infrastructure Investment and Jobs Act, and the President’s Working Group on Financial Markets issued a substantial report on a framework for regulating stablecoins. These actions on taxation and oversight are the first real steps toward regulation of an industry that SEC Chair Gary Gensler only recently likened to the "Wild West." In this article, Bates takes a closer look at the soon-to-be-new law on digital asset taxation and the proposed regulations on stablecoins amid the broader debate on crypto regulation.

On October 6, 2021, in his first speech as SEC Enforcement Division, Director Gurbir Grewal urged participants at a PLI Broker/Dealer Regulation and Enforcement Conference to take a “proactive approach” and engage in real “cooperation” in order to “promote better conduct among market participants.”

Remember 2010? Prince William and Kate got engaged. Tiger Woods apologized. BP Deepwater Horizon exploded. And Mark Zuckerberg was named Time Magazine’s “Person of the Year.” Also in February 2010, the SEC issued guidance to public companies on climate change-related disclosure obligations. Fast forward over ten years later and on September 22, 2021, the SEC Division of Corporation Finance (“Division”) reminded issuers about complying with that 2010 guidance.