The Department of Labor (DOL) has released the transcripts of the hearings held by the agency in August on its proposed fiduciary rule. The final comment period on the rule will close Sept. 24, 2015.
On Sept. 4, the SEC voted to issue a proposal to amend Rule 13n-4 under the Exchange Act to implement the Exchange Act requirement that security-based swap data repositories make data available to certain regulators and other authorities on a confidential basis, on the condition that the regulator or other authority provide indemnification to the security-based swap repository and the SEC for any expenses arising from litigation relating to the information provided. The proposal includes an exemption from the indemnification requirement for certain regulators either because they are unable to provide indemnification or because access by the SEC to data repositories of certain foreign regulators requires that in return the foreign regulators have “immediate and continuous access to all of the information needed [from, e.g., U.S. securities-based swap repositories] for the exercise of their duties.” Comments on the proposal are due 45 days after publication in the Federal Register.
On Sept. 2 the Municipal Securities Rulemaking board (MSRB) announced that it had filed a rule proposal with the SEC seeking approval to apply MSRB Rule G-20, which provides limitations on business-related gift-giving by municipal securities dealers, to municipal advisors. The proposed amendments also would add a new provision to specifically prohibit both dealers and municipal advisors from seeking reimbursement for certain entertainment expenses from the proceeds of an offering of municipal securities. In addition, the MSRB is seeking to extend to municipal advisors related books and records requirements through proposed amendments to MSRB Rule G-8.
The MSRB announced on Sept. 3 that it is linking the effective date of its new “best-execution” rule for retail investor transactions to the publication of implementation guidance so that municipal securities dealers will have sufficient time to review the forthcoming guidance. The MSRB filed documents with the SEC to establish the effective date of the new rule four months from the publication date of the MSRB’s implementation guidance. MSRB Rule G-18, on best execution, with related amendments to MSRB Rules G-48 and D-15, requires dealers to seek the most favorable terms reasonably available for their retail customers’ transactions.
On Sept. 8 FINRA published Regulatory Notice 15-32 to provide guidance regarding the FINRA filing requirements and review procedures that apply to firms that participate in Regulation A+ offerings. Specifically, FINRA’s Corporate Financing Rules require firms that participate in Regulation A+ offerings to file with FINRA information specified in the rules. FINRA’s Communications with the Public Rule and its Suitability Rule also apply to a firm’s participation in these offerings. FINRA also reminds firms that communications with the public concerning a Regulation A+ offering of direct participation program (DPP) securities must be filed with FINRA.
Enforcement & Litigation
On Sept. 8 the Financial Crimes Enforcement Network (FinCEN) announced a settlement with Desert Palace, Inc. d/b/a Caesars Palace, in which Caesars agreed to pay an $8 million civil money penalty for what FinCEN described as its willful and repeated violations of the Bank Secrecy Act (BSA). FinCEN alleged that “the casino allowed a blind spot to exist in its compliance program for private gaming salons, which are reserved for Caesars’ wealthiest clientele, who may gamble millions of dollars in a single visit, and which openly allowed patrons to gamble anonymously.” The casino agreed to conduct periodic external audits and independent testing of its anti-money laundering (AML) compliance program, report to FinCEN on mandated improvements, adopt a rigorous training regime, and engage in a “look-back” for suspicious transactions.