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SIFMA Releases Draft Municipal Advisor Rule G-42 Compliance Documents

Starting June 23, municipal advisors will be subject to revised Rule 42 and its heightened engagement letter and disclosure obligations. SIFMA has released exposure drafts of compliance documents to help MAs meet those requirements. The drafts include a model engagement letter, disclosure statements for both new and continuing engagements and a client -intake checklist. They are here. Broadly speaking, the amended Rule imposes upon municipal advisors

  • A fiduciary duty of care and loyalty to municipal entity clients - but only a duty of care to obligated persons (like conduit ...
Posted in: Rule G-42, SIFMA
Tags: burr forman, Municipal Advisors, Rule G-42, securities litigation, Securities Litigation & Arbitration, SIFMA
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SEC Shows It's Serious About Cyber Security
A week after OCIE announced it would conduct a second round of cyber-security exams, the Commission emphasized the issue by bringing an enforcement action against a non-custodial investment-adviser over a remediated data breach that caused no customer harm. The adviser used a third-party-hosted web server, on which was stored the personally-identifiable information ("PII") of about 100,000 people, including the firm's 8,400 customers. The server suffered a cyber-attack and data breach in July 2013. The firm responded by retaining multiple consultants, investigating the ...
Posted in: Cyber Security, OCIE, SEC, SIFMA
Tags: burr forman, cyber-security exams, OCIE, personally-identifiable information, PII, Safeguards Rule, SEC, Securities and Exchange Commission, Securities Industry and Financial Markets Association, Securities Litigation & Arbitration, SIFMA
Concerns Mount over Department of Labor's Proposed Fiduciary Rule
The Department of Labor ("DOL") released a controversial proposed rule on April 20, 2015, that seeks to expand fiduciary duties in the context of retirement-investment advice. Specifically, the proposed rule would rework a 1975 five-part test that greatly limits the fiduciary responsibilities of advisors for plans covered under the Employment Retirement Income Security Act ("ERISA"). The new fiduciary-duties standard proffered by the rule would require advisors to put the best interests of the client ahead of any profit motive, especially the incentives inherent to certain ...
Posted in: FINRA, SEC, SIFMA
Tags: DOL, fiduciary, fiduciary duties, Fiduciary Rule, finra, IRA, retirement-investment advice, SEC, Securities and Exchange Commission, The Department of Labor, The Financial Industry Regulatory Authority
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"No News Is Bad News" on BSA Compliance

Addressing SIFMA's Anti-Money Laundering ("AML") conference Wednesday, SEC Enforcement Director Andrew Ceresney said that - when it comes to AML - the lack of red flags itself is a red flag. Bank Secrecy Act ("BSA") AML requirements under the Currency & Foreign Transactions Reporting Act of 1970, as amended, 31 U.S.C. §5311, et seq. (31 C.F.R. Chap. X and related laws / regulations: here) require financial institutions to file "suspicious activity reports" ("SARs") with the Financial Crimes Enforcement Network ("FinCEN") within the Department of Treasury. Examples ...

Posted in: SEC, SIFMA
Tags: AML, Andrew Ceresney, Anti-Money Laundering, Bank Secrecy Act, BSA, Currency & Foreign Transactions Reporting Act of 1970, SEC, SEC Enforcement Director, SIFMA
Cybersecurity Continues as a Major Focus of Financial Industry's Concerns
With only three official days left of the current Congress, conversations Wednesday turned towards cybersecurity in the financial sector. The Commodity Futures Trading Commission, Office of the Comptroller of the Currency, and the Securities Exchange Commission all discussed planned or ongoing strategies to prepare for future cyber-attacks, highlighting such methods as compliance examinations of firms' cybersecurity measures. These organizations' efforts emphasize the substantial scrutiny on the effects that cyber-attacks can have on both financial institutions and ...
Posted in: FINRA, SIFMA
Tags: CARDS, Cybersecurity, finra, NIST Cybersecurity Framework, Office of the Comptroller of the Currency, Securities Exchange Commission, SIFMA, The Commodity Futures Trading Commission, UCC, Uniform Commercial Code
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FINRA Conducting Cyber-Security Sweep Exam
Reacting in part to recent data-breaches and cyber-attacks on larger retailers, the Financial Industry Regulatory Authority ("FINRA") is conducting a targeted examination of some 20 broker-dealer member firms' compliance and risk-management approaches to cyber-security, aimed at increasing regulators' understanding of the cyber-security risk environment and various approaches and methods used throughout the industry. Wall Street conducted its second comprehensive cyber-security drill, Quantum Dawn 2, just this past July. The after-action study and related ...
Posted in: FINRA, SIFMA
Tags: Financial Industry Regulatory Authority, finra, SIFMA
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MSRB Proposes Conduct Rules For Municipal Advisors
On Thursday, January 9, the MSRB re-proposed new Rule G-42 promulgating standards of conduct for Municipal Advisors ("MA's") subject to the almost-newly-effective SEC MA Rule, 17 CFR § §240.15Ba1-1 to 15Ba1-8 (now delayed until July 1, 2014). MSRB Notice 2014-01 covers the following principal objectives: I. It establishes an MA's fiduciary duty to Municipal-Entity ("ME") clients, but merely a duty of care to "Obligated Person" ("OP") clients (consistent with Dodd-Frank). II. It moves the "engagement letter" regulatory trend forward by imposing a detailed ...
Posted in: MSRB, SIFMA
Tags: MSRB, SIFMA
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