On March 31, 2022, the Securities Industry and Financial Markets Association (“SIFMA”) released its after-action report on Quantum Dawn VI – a global financial-markets cybersecurity exercise.
Quantum Dawn VI was conducted on November 18, 2021, with over 1,000 participants from 240 financial institutions and regulatory bodies representing 20 countries. The exercise simulated a large-scale ransomware attack by a state-actor against major global financial institutions and regulators. The scenario was chosen, in part, based upon an observed 93% increase in ransomware ...
The Securities Industry and Financial Markets Association (“SIFMA”) recently proposed sweeping modernization of industry self-regulatory rules to reflect firms’ successful pivot to remote operations over the past year. SIFMA suggests significant remote work likely will continue, even after the COVID-19 “pilot program.”
SIFMA proposed a “location agnostic” overhaul of the Rules in its February 16 comment letter in response to FINRA’s call for “lessons learned” during the COVID-19 pandemic. See FINRA Reg. Notice 20-42 (Dec. 16, 2020).
Firms’ ...
The Massachusetts Securities Division adopted a watered-down fiduciary-rule for broker-dealers, effective March 6, with a compliance deadline of September 1, 2020. The move comes after years of announced intention to do so – especially after the Obama Labor Department’s fiduciary-rule got shot down in the courts.
The Rule requires a broker-dealer to act as a fiduciary for retail customers (excluding institutional accounts and investment advisers) when a broker:
• Has discretion (other than time and price);
• Has undertaken a contractual fiduciary duty; or
• Has ...
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 ...
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 ...
The SEC and FINRA each issued February 3 cyber security "alerts" summarizing last year's sweep exams and pointing out the obvious. In two parts, the SEC's press-release covered the results of the Commission's 2013-2014 sweep exams and an investor bulletin. SEC Press Release 2015-20, here. The Commission's Office of Compliance Inspections and Examinations ("OCIE") conducted a "sweep exam" - or wide industry survey on the subject among broker-dealers and investment advisers- during 2013 and 2014. The good news is that a wide majority of them have have information security ...