Final Rules

SEC adopts mutual fund proxy voting disclosure of “Say-on-Pay” votes for institutional investment managers (Form N-PX amendments)

On November 2, the SEC adopted amendments to Form N-PX to expand the information mutual funds and ETFs report about their proxy votes, and new “Say on Pay” vote reporting requirements by institutional investment managers.

Read the press release, fact sheet and adopting release.

SEC adopts compensation recovery listing standards and disclosure rules

On October 26, the SEC adopted rules to require securities exchanges to adopt listing standards that require issuers to develop and implement a policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers.

Read the press release, fact sheet and adopting release.

SEC adopts rule amendments to modernize how broker-dealers preserve electronic records and enhance the electronic recordkeeping requirements for security-based swap entities

On October 12, the SEC adopted amendments to provide a new optional method to meet SEC electronic recordkeeping requirements. This new audit-trail alternative “permits the recreation of an original record if it is altered, over-written, or erased” and applies to broker-dealers, security-based swap dealers and major security-based swap participants.

Read the press release, fact sheet and final rule release.

Proposed Rules

SEC proposes new fund liquidity framework; swing pricing

On November 2, the SEC proposed amendments to their fund liquidity requirements, including establishing new minimum standards for classification analyses, and a new 10% minimum of highly liquid assets, and new public reporting requirements. The SEC also proposed “swing pricing” and a 4 pm ET “hard close” to receive that day’s price.

Read the press release, fact sheet and proposing release.

SEC proposes new oversight requirements for certain services outsourced by investment advisers

On October 26, the SEC proposed new investment advisor due diligence and monitoring requirements for certain services and functions outsourced to service providers.

Read the press release, fact sheet and proposing release.

SEC reopens comment periods for several rulemaking releases due to technological error in receiving certain comments

On October 7, the SEC reopened the public comment periods for 11 Commission proposals and one request for comment due to a technological error that resulted in a number of public comments submitted through EDGAR not being received (and posted) by the Commission.

Read the press release.

Other SEC Actions

Risk Alert: Observations related to regulation NMS Rule 606 disclosures (payment for order flow)

On Nov 10, the SEC’s Division of Examinations issued a Risk Alert highlighting exam observations to remind broker-dealers of their obligations under the new and enhanced Rule 606(a) requirements: (1) broker-dealer figures reported in public disclosures and (2) broker-dealer descriptions of the material aspects of their relationships with each specific venue.

Opens in new window(PDF :KB)Read the Risk Alert.

Digital Assets

FINRA podcast: Membership Application Program: Reviewing and approving digital asset firms

On November 1, FINRA held a podcast about the role their Membership Application Program team is playing in the digital asset space, some common sticking points in these new and continuing member applications, and how FINRA is working to support innovation while protecting investors in this dynamic environment.

Listen to the podcast and read FINRA’s digital asset guidance materials.

Department of Labor

The Department of Labor (DOL) held a public hearing on proposed amendments to PTE 84-14

On November 17, the DOL held a public hearing on their proposed amendments (regarding compensation in connection with sales of recommended annuities to retirement investors, including rollover recommendations) and opened a supplemental comment period for additional written comments. The DOL will publish a notice in the Federal Register announcing that the hearing transcript is available and when the supplemental comment period ends.