Posts from June 2020.

The Commodity Futures Trading Commission’s (“CFTC”) Final Interpretive Guidance on the “actual delivery” exception to regulatory jurisdiction for digital assets became effective June 24, 2020.  See 85 Fed. Reg. 37734.  The CFTC unanimously adopted the Guidance in March:  Retail Commodity Transactions Involving Certain  Digital Assets, Rel. 8139-20 (Mar. 23, 2020).

The Final Guidance adopts the 2017 Proposed Interpretation with some minor changes.  The “actual delivery” exception to CFTC regulatory jurisdiction still requires unencumbered physical ...

On June 16, the SEC issued a temporary exemptive order, allowing registered municipal advisors to solicit banks, their wholly-owned commercial lenders and credit unions in connection with direct placements by municipal-issuer clients.  Ordinarily, that placement-agent activity would require broker-dealer registration under ’34 Act Section 15 (15 U.S.C. § 78o).

The Commission granted the temporary exemption to allow MAs to assist municipal issuers – especially smaller municipalities not otherwise eligible for the Fed’s Municipal Liquidity Facility – with ...

The Supreme Court allowed the SEC to seek “disgorgement” as a form of “equitable relief” in civil-actions, but limited the remedy to net profits for benefit of harmed investors.  Answering part of a question reserved in 2017’s Kokesh opinion, this week’s Liu opinion raised more questions than it answered.

The Liu’s raised investor funds for an EB-5 visa program under a private offering, but pocketed most of them.  In a civil enforcement action, the SEC obtained the Liu’s disgorgement of full amount raised from investors (not net), jointly and severally.  The Supreme ...

Effective June 30, SEC Reg. BI requires broker-dealers to make recommendations only in the “best interests” of retail customers, imposing additional disclosure, care, conflicts-of-interest and compliance obligations.  The disclosure obligations include dissemination of Form CRS educating customers on the nature of their relationship with the firm.

FINRA Regulatory Notice 20-18, issued June 19, makes corresponding changes to its Rules stressing the primacy of Reg. BI with respect to retail customers:

Capital Acquisition Brokers’ suitability (Rule 211).

Tags: finra, Reg. BI, SEC
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