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FinCEN Roundup: Recent Developments, Rulemakings on Anti-Money Laundering
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02-24-22

FinCEN Roundup: Recent Developments, Rulemakings on Anti-Money Laundering

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.

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FINRA Releases 2022 Exam and Risk Monitoring Report - Plus Bates’ Annual FINRA Chart
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02-18-22

FINRA Releases 2022 Exam and Risk Monitoring Report - Plus Bates’ Annual FINRA Chart

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.

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Crypto Regulation: Speed and Size of Evolving Market Creates Urgent Need for Framework

02-04-22

Crypto Regulation: Speed and Size of Evolving Market Creates Urgent Need for Framework

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.

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SEC Issues New Guidance on Form CRS Disclosures
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01-06-22

SEC Issues New Guidance on Form CRS Disclosures

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.

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The SEC’s New Marketing Rule - Webinar Takeaways

12-21-21

The SEC’s New Marketing Rule - Webinar 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.

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NASAA Survey Reveals Some Firms Not Operating Under Reg BI One Year Later
NASAA President Melanie Senter Lubin (photo: NASAA.org)

11-18-21

NASAA Survey Reveals Some Firms Not Operating Under Reg BI One Year Later

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.

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New Crypto Regulation: Taxation and Oversight Underway, Stablecoins Gaining Support
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11-15-21

New Crypto Regulation: Taxation and Oversight Underway, Stablecoins Gaining Support

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.

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Climate Change-Related Risk: New SEC Guidance on Disclosures, Treasury’s FIO Evaluating Impact on Insurance

10-15-21

Climate Change-Related Risk: New SEC Guidance on Disclosures, Treasury’s FIO Evaluating Impact on Insurance

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. 

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NASAA Reviews Senior Financial Protections - Uncovers Deficiencies in Policies to Protect Seniors; Promotes Diversity, Equity, Inclusion Goals
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09-30-21

NASAA Reviews Senior Financial Protections - Uncovers Deficiencies in Policies to Protect Seniors; Promotes Diversity, Equity, Inclusion Goals

In September 2021, NASAA published two reports that have implications for the protection of senior investors, including an analysis of the status of NASAA’s Model Act to Protect Vulnerable Adults from Financial Exploitation by states that have adopted it or parts of it and a presentation of coordinated examination results of investment adviser firms by state securities regulators, which found “serious deficiencies” in policies and procedures to protect seniors, among other findings.

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Regulators Turn Up the Heat on SPACs with More Enforcement and Potential Rulemaking
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09-23-21

Regulators Turn Up the Heat on SPACs with More Enforcement and Potential Rulemaking

Regulators have moved from statements to guidance to alerts and now to enforcement and rulemaking in their efforts to gain some degree of control over the exuberant Special Purpose Acquisition Company (“SPACs”) marketplace. As highlighted in our white paper, published in late April 2021, the SEC had been prolific in stating its concerns about SPACS.

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FINRA Issues Updated Vendor Supervision Guidance, Seeks Feedback on Cloud Computing; Warns of New Phishing Scam
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09-15-21

FINRA Issues Updated Vendor Supervision Guidance, Seeks Feedback on Cloud Computing; Warns of New Phishing Scam

FINRA remained busy through the end of Summer with several important regulatory actions. New actions included issuing updated guidance on supervision of third-party vendors, requesting feedback on a report by the Office of Financial Innovation (“OFI”) concerning broker-dealer approaches to cloud computing, and raising additional alarms about a phishing campaign using fraudulent FINRA email domains.

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Webinar Takeaways - Employment Issues: What to Expect Going Forward

08-19-21

Webinar Takeaways - Employment Issues: What to Expect Going Forward

Bates Group recently hosted employment litigators and experts for a CLE program to discuss the effects that current and future employment issues have had on workforce reintegration, supervisory activity, mental health and substance abuse, disciplinary actions, and Form U5 language and terminations. Panelists included financial services industry leaders and Bates Group Experts who shared what they are seeing today and what employers and employees can expect going forward in the post-COVID work environment. Bates looks at the highlights and insights from the program.

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The Inevitability of Cryptocurrency Regulation: The Race to Establish a Regulatory Framework is On
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08-12-21

The Inevitability of Cryptocurrency Regulation: The Race to Establish a Regulatory Framework is On

Legislators, administrators and regulators have publicly advocated for government intervention to protect consumers and investors from cryptocurrency price volatility and the fraud and money laundering that has proliferated across digital platforms. With the passage of the bipartisan infrastructure bill in the U.S. Senate, comprehensive regulation of the industry seems inevitable. Meanwhile, SEC Chair Gensler’s recent remarks on crypto assets demonstrate the regulator’s focus on addressing gaps and protecting investors.

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SEC Focuses on Wrap Fee Programs, Fixed Income Principal and Cross Trading Compliance Deficiencies in New Alerts
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08-04-21

SEC Focuses on Wrap Fee Programs, Fixed Income Principal and Cross Trading Compliance Deficiencies in New Alerts

On July 21, 2021, the SEC Division of Examination issued two new risk alerts on Wrap Fee Programs and Principal and Cross Trading. The alerts were based on the latest observations of compliance deficiencies drawn from extensive examinations. The Division stated that the new alerts should be considered alongside earlier priorities and observations from 2019. In this article, Bates reviews the Division’s recent findings and guidance.

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Contact Bates Group

Bates Group is with you every step of the way. Contact us today for more information on how our End-to-End Solutions can help your firm.