Written by Michael Wu On September 29, 2011, the SEC’s examination staff issued a Risk Alert warning of significant concerns regarding trading through sub-accounts, and offered suggestions to help securities industry firms address these risks. In the alert, the staff identified certain risks associated with the master/sub-account trading model such…
Written by Michael Wu The SEC has adopted a new rule pursuant to Section 13(h) of the Securities Exchange Act of 1934 requiring large traders to register with the SEC and imposing reporting requirements on their broker-dealers. In her speech on July 26, 2011, SEC Chairman Mary L. Shapiro said,…
Written by Michael Wu On January 21, 2011, the SEC released its study on the effectiveness of the standard of care required of broker-dealers and investment advisers that provide personalized investment advice regarding securities to retail customers (“Covered Broker-Dealers and Investment Advisers”). The study also considered the existence of regulatory…
Written by Michael Wu On December 15, 2010, FINRA Rule 3270 became effective. FINRA Rule 3270 requires each registered representative of a broker-dealer to provide it with prior written notice of an outside business activity. FINRA Rule 3270, which replaced NASD Rule 3030 and NYSE Rule 346, specifically identifies the…
Hedge fund and private equity fund managers that use registered broker-dealers to raise capital on behalf of their funds should be aware of a recent report from the North American Securities Administrators Association (“NASAA”). The 2010 Broker-Dealer Coordinated Examination Report identifies the most prevalent compliance deficiencies by broker-dealers and offers a…