SEC Processing of Complaints
On Apr. 19, SEC issued bulletin on process used for their handling of investor complaints.
- Individual complaints made against brokers, investment advisers, mutual funds, and others.
- Complaints could relate to any problems from investments, accounts, financial professionals.
- Order-handling, trade execution, confirmation, dividends, fees, commissions, or disclosure.
- The SEC investor education office will send a complaint to a firm, if investor has consented.
- Will then request that firm send written report to the investor and OIEA on the issues raised.
- SEC division enforcement may also conduct wider investigations, on a confidential basis.
- OIEA will not update investor on status of a complaint, or confirm its existence in review.
CFTC Registration Form 8-R
On Apr. 28, CFTC issued form 8-R to register individuals working for firms in futures markets.
- Form 8-R is an application for individual to register with CFTC as an associated person.
- Associated to registrant, floor broker, or floor trader, or to be listed as principal of registrant.
- Form 8-R also used by NFA, as US registered futures association as authorized by CFTC.
- CFTC delegated registration function to NFA including the processing of Form 8-R filing.
- NFA has requested CFTC make changes to Form 8-R, and which are now being adopted.
- Disciplinary information question on fitness of applicant related to statutory disqualification.
- Clarified that “principal” goes beyond CFTC-registrant, to include any firm connected to.
- Revised version of Form 8-R shall be effective when NFA make it available on their web-site.
- CFTC also issued the adoption of a revised registration Form 8-R, and cancelled Form 3-R.
MSRB Board Meeting Apr. 2017
On Apr. 19, MSRB scheduled rulemaking items to discuss on agenda if its Apr. 26-27 board meeting.
- Agenda covered advertising, CUSIP allocation, initiatives on additional data, and market tools.
- Guidance on MSRB rules on using solicitor re municipal advisor duties if not subject to G-42.
- Comments received on proposed changes to MSRB Rule G-21 on advertising by dealers.
- This is part of long-term effort to revise and update MSRB Rule G-11, and related rules.
- Comments now received by SEC on MSRB proposed rule change, to add new Rule G-49.
- Comments on the review of existing MSRB Rule G-26, on customer account transfers.
FINRA Arbitrator Expedited List
On Apr. 26, FINRA proposed rules on expedited lists of arbitrators for customer and industry code.
- Would amend customer and industry codes, to expedite list selection process in arbitration.
- Amended Rules 12402 and 12403 of code of arbitration procedure, for customer disputes.
- Also amended FINRA Rule 13403 of code of arbitration procedure for industry disputes.
- Director of FINRA office of dispute resolution (ODR) will send out list, or lists, of arbitrators.
- List as generated by the neutral list selection system (NLSS), to all parties at the same time.
- In 30 days of when last answer due, regardless of whether parties’ had agreed to extend dates.
- Requested comments be submitted within 21 days from publication in the federal register.
FINRA Social Media Communication
On Apr. 25, FINRA issued notice on social media and website communications with the public.
- Follows FINRA earlier 2010/11 social media guidance, but does not change the principles.
- Issued new guidance due to a further increase in social media usage, changes in technology.
- Added guidance on chatrooms, text messages, mobile applications, other new tech usage.
- Depended on the content, not on the type of device or technology used for communication.
- If communicate on business by text message app or chat, must ensure records can be kept.
- Personal communications not required to be retained regardless of the method, or content.
- Required native advertising communications should be both fair and balanced as to risks.
- Not responsible for unsolicited third-party opinions or comments, but must disclose if
have paid for, and notify retail to use caution.
FINRA Insider Red Flags, Tips
On Apr. 19, FINRA issued video on identifying red flags for insider trading, and providing tips.
- With Cam Funkhouser, EVP office of fraud detection and market intelligence (OFDMI).
- Interview cited some red flags firms should look out for, in relation to insider trading.
- Trading before material news, appearance of patterns, unregistered stock certificates
- Overview recent cases, and how to contact FINRA with a tip on insider trading or fraud.
- Gave contact information, no specific method to report, website, hotline, contact staff.
- More detail is better, who, what, why, when and where, rather than saying think it is a problem.
- Don't assume that FINRA already know about, so if you see something, say something.