SEC Rulemaking

SEC finalizes rules to reduce risks in clearance and settlement

On February 15, the SEC adopted rule changes to shorten the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade date (T+2) to one (T+1). The transition date will be May 28, 2024.

Review the press release.

SEC proposes revision to Privacy Act rule

On February 14, the SEC proposed a rule that would revise the Commission’s regulations under the Privacy Act. The Privacy Act is the principal law governing the handling of personal information in the federal government. “I am pleased to support this proposal because, if adopted, it would broadly update our Privacy Act rules to account for modern technology, as well as provide the public with greater transparency into the Commission’s use of this data,” said SEC Chair Gary Gensler. “These amendments would provide more clarity on how the public can access their records maintained by the Commission…”

Review the press release.

SEC proposes amendments to the advisor “custody rule”

On February 15, the SEC proposed rule changes to “to enhance protections of customer assets managed by registered investment advisers.” Chair Gensler said, “In particular, Congress gave us authority to expand the advisers’ custody rule to apply to all assets, not just funds or securities. Further, investors would benefit from the proposal’s changes to enhance the protections that qualified custodians provide. Thus, through this expanded custody rule, investors working with advisers would receive the time-tested protections that they deserve for all of their assets, including crypto assets, consistent with what Congress envisioned.”

Read the press release.

SEC: Other Activities

SEC Division of Examinations announces 2023 priorities

On February 7, the SEC Division of Examinations announced its 2023 examination priorities.

Review the press release and 2023 priorities.

SEC’s Investor Advisory Committee (IAC) – March meeting

On March 2, the SEC’s IAC held their March meeting. The meeting included: Commissioner remarks and introduction of the new Investor Advocate; panel discussions on the growth of private markets, oversight of investment advisers, and the SEC’s fund liquidity risk management/swing pricing rule proposal; approval of a recommendation regarding improving customer account statements to better serve investors; and other matters.

Review the meeting materials, including the IAC’s account statement recommendation and webcast replay (when posted).

FINRA

FINRA provides update on sweep regarding social media influencers, customer acquisition and related information protection

On Feb 28, FINRA provided follow-up guidance to their September 2021 sweep of firms’ practices related to their acquisition of customers through social media channels and their sharing of customers’ usage information with affiliates and non-affiliated third parties.

Review the FINRA guidance.

Retirement

Labor Secretary Marty Walsh to resign; Deputy Secretary Julie Su nominated

Labor Secretary Marty Walsh announced his resignation. Deputy Labor Secretary Julie Su, a former California labor secretary, was nominated to take over as Secretary.

Read the statement from the White House.

Florida court vacates Labor Department guidance establishing rollover advice as fiduciary

The court vacated the DOL’s guidance on IRA rollover advice in the preamble to its Prohibited Transaction Exemption 2020-02. The DOL has not yet announced whether they will appeal the decision or take other action with respect to their Fiduciary Rule.

Read the full order.

Relief for reporting required minimum distributions for IRAs for 2023 - IRS Notice 2023-23

On March 7, the IRS provided penalty relief for IRA providers that incorrectly notified IRA owners who will attain age 72 in 2023 that the owners have required minimum distribution (RMD) obligations for 2023. This issue arose because The SECURE 2.0 Act changed the RMD starting age and the short timeframe that providers had to react to that statutory change. The relief is conditioned on the IRA provider notifying the owner no later than April 28, 2023, that no RMD is required for 2023.

Read the IRS Notice.