• James Dombach attorney profile image

    On March 14, 2018, the Securities and Exchange Commission (the “Commission”) proposed Rule 610T to create a pilot regarding transaction fees,1 creating three Test Groups designed to obtain data resulting from the lowering of the maximum access fee from its current $.003 per share2 to $.0015 per share for Test Group 1 and $.0005 per share for Test Group 2.  For Test Group 3, the Commission is proposing to prohibit rebates in connection with an execution, not only with respect to top-of-book liquidity, but also with respect to depth-of-book interest.  The Commission also eliminated a potential work-around to the prohibition on rebates in Test Group 3 by also prohibiting discounts on transaction fees linked to a broker-dealer’s posted volume on an exchange.  However, an exchange could offer its market maker incentives for meeting market quality metrics adopted as part of new exchange rules. 

  • Are ICOs in the Crosshairs of New York’s Martin Act?
    by: Daniel S. Alter | Law 360 | (03/15/2018)

    Over the past several months, the U.S. Securities and Exchange Commission has launched a major enforcement initiative against initial coin offerings, otherwise known as ICOs. An ICO is defined as a “means of crowdfunding centered around cryptocurrency, which can be a source of capital for startup companies.” The marketed coins are “preallocated to investors in the form of ‘tokens,’ in exchange for legal tender or other cryptocurrencies ... These tokens supposedly become functional units of currency if or when the ICO's funding goal is met and the project launches.”

  • This is a reminder that May 11, 2018 is the deadline for implementing new Financial Crimes Enforcement Network (FinCEN) requirements under the Bank Secrecy Act. The requirements apply to a wide swathe of financial institutions, including securities broker-dealers, banks, mutual funds, and futures commission merchants and introducing brokers in commodities.  These enhancements to anti-money laundering programs (AML) are often referred to as “Customer Due Diligence” (CDD) requirements.

  • Joseph P. Facciponti attorney profile image

    On February 21, 2018, the SEC issued new guidance for public companies regarding the disclosure of material cyber risks and incidents affecting their businesses.  The new guidance updates and expands on guidance issued in October 2011 by the SEC’s Division of Corporate Finance,  which advised that although no rule explicitly mandates cybersecurity disclosures, cyber risks and incidents could nonetheless be sufficiently material to investors to warrant disclosure in a company’s public filings. The new guidance is similarly non-binding but nonetheless addresses how disclosure of material cyber risks and incidents may be required as part of a company’s existing disclosure obligations. Here are five takeaways from the new guidance.

  • Paris Hilton, Floyd Mayweather, Jamie Foxx and other celebrities have all recently promoted Initial Coin Offerings (ICOs) to their social media followers.  But as celebrity promotion and endorsement of ICOs and other investments gain steam, the Securities and Exchange Commission is reminding them to heed federal securities laws.

  • Securities industry participants should be well-prepared for the introduction of a shortened settlement period for most broker-dealer securities transactions.[1]  Effective on September 5, 2017, amended Exchange Act Rule 15c6-1 prohibits a broker-dealer from effecting or entering into a contract for the purchase or sale of a security that provides for payment of funds and delivery of securities later than T+2, unless otherwise expressly agreed to by the parties at the time of the transaction.[2]  As the SEC has explained: “The amended rule [applies] the T+2 settlement cycle to the same securities transactions currently covered by the T+3 settlement cycle.  These include transactions for stocks, bonds, municipal securities, exchange-traded funds, certain mutual funds, and limited partnerships that trade on an exchange.”[3]