SEC Rulemaking

SEC Publishes Fall 2022 Regulatory Flex Agenda

In January, the SEC published their Fall 2022 regulatory priorities. Key items include Fund Swing Pricing/Hard 4 PM Close, Corporate Disclosures (Climate, Cyber, Human Capital Management, etc.), Move to T+1 Settlement Cycle, Fund Fee Disclosure and Reform, and Proxy Shareholder Proposals. Items on the agenda already finalized include Tailored Shareholder Reports for mutual funds and ETFs, Form N-PX Amendments, and Broker Dealer Electronic Books and Records.

The Short-Term Agenda is available here.

The Long-Term Agenda is available here.

SEC Proposes Rule to Prohibit Conflicts of Interest in Certain Securitizations

On January 25, 2023, the SEC proposed a rule intended to prevent the sale of asset-backed securities that are tainted by material conflicts of interest. This rulemaking was undertaken to implement Section 27B of the Securities Act of 1933, a provision added by Section 621 of the Dodd-Frank Act.

• Comments Due: 30 days after date of publication in the Federal Register or March 27, 2023, whichever period is longer
• The press release is available here.

SEC Leadership Changes

Paul Munter Named Chief Accountant

On January 11, 2023, the SEC announced Paul Munter has been appointed Chief Accountant; he has served as Acting Chief Accountant since January 2021.

The press release is available here.

SEC Announces Appointment of Cristina Martin Firvida as Investor Advocate

On January 10, 2023, the SEC announced the appointment of Cristina Martin Firvida as Director of the Office of the Investor Advocate, effective Jan. 17, 2023.

The press release is available here.

SEC Announces Departure of Dan Berkovitz; Megan Barbero Named General Counsel

On December 22, 2022, the SEC announced General Counsel Dan Berkovitz will depart the agency, effective Jan. 31, 2023, and Megan Barbero, currently SEC Principal Deputy General Counsel, will be appointed General Counsel.

The press release is available here.

SEC: Other Activities

Risk Alert: Observations From Broker-Dealer Examinations Related to Regulation Best Interest

On January 30, 2023, the Division of Examinations published a Risk Alert to highlight observations from examinations related to Regulation Best Interest.

The Risk Alert is available here.

SEC Seeks Candidates for Small Business Capital Formation Advisory Committee

On January 20, 2023, the SEC announced it is seeking candidates for appointment to the Small Business Capital Formation Advisory Committee to provide advice and recommendations on Commission rules, regulations, and policy matters relating to small businesses, including smaller public companies.

• Submissions Due: To be considered timely, submissions must be received by February 17, 2023.
• The press release is available here.

FINRA

Regulatory Notice 23-02: FINRA Amends FINRA Rule 2231 (Customer Account Statements)

On January 18, 2023, FINRA published Regulatory Notice 23-02, amending Rule 2231 to incorporate provisions from NYSR Rule 409T, without substantive change, and others with some modifications. The new supplementary materials in 2231 remind firms of existing requirements under Rule 4311, SEC guidance on using electronic media to satisfy delivery obligations, and Rule 3150, and incorporate concepts largely derived from the NYSE provisions.

• Effective Date: January 1, 2024.
• Regulatory Notice 23-02 is available here.

Report on 2023 FINRA's Examination and Risk Monitoring Program

On January 10, 2023, FINRA published its 2023 Report on FINRA’s Examination and Risk Monitoring Program (the Report), which provides member firms with insight into findings from the recent FINRA oversight activities. New findings include Manipulative Trading, Fixed Income – Fair Pricing, Fractional Shares: Reporting and Order Handling, and Regulation SHO – Bona Fide Market Making Exemptions and Reuse of Locates for Intraday Buy-to-Cover Trades

The report is available here.

Regulatory Notice 22-31: FINRA Shares Practices for Obtaining Customers' Trusted Contacts

On December 15, 2022, FINRA published Regulatory Notice 22-31: FINRA Shares Practices for Obtaining Customers’ Trusted Contacts. The Notice summarizes member firms’ regulatory obligations, discusses the benefits of trusted contacts in administering customers’ accounts, highlights customer education resources and shares effective practices member firms use.

Regulatory Notice 22-31 is available here.

Retirement

DOL Publishes Fall 2022 Reg Flex Agenda

In January, the DOL published their Fall 2022 regulatory priorities. Key items include Improving Participant Engagement and Effectiveness of ERISA Retirement Plan Disclosures, amendments to their Fiduciary definition, Prohibited Transaction Exemption Procedures, Pension Benefit Statements-Lifetime Income Illustrations, and Improvement of the Form 5500 Series and Implementing Related Regulations.

The full Reg Flex Agenda is available here.

Digital Assets

House Financial Services Committee (HFSC) - New Digital Assets Subcommittee

Chairman Patrick McHenry (R-NC-10) of the HFSC announced a new digital assets subcommittee led by Rep French Hill (R-AR-02). The committee will focus on: (1) Providing clear rules of the road among federal regulators for the digital asset ecosystem, (2) Developing policies that promote financial technology to reach underserved communities, and (3) Identifying best practices and policies that continue to strengthen diversity and inclusion in the digital asset ecosystem.

Read the Press Release here.

_{This newsletter is not intended as legal advice. Broadridge recommends you contact your legal counsel for a complete understanding of the information contained in this publication.}