On December 18, 2019, the CFTC proposed rules that would modify and codify the cross-border application of certain of its Title VII swap rules to both U.S. and non-U.S. registered swap dealers and major swap participants. Among other changes, these proposed rules would revise (1) which cross-border swaps must be
Continue Reading
Zachary J. Zweihorn
Mr. Zweihorn is counsel in Davis Polk’s Financial Institutions Group and the trading and markets practice. [Full Bio]
Visual Memorandum: SEC’s Security-Based Swap Capital, Margin and Segregation Rules
On June 21, 2019, the SEC adopted security-based swap (SBS) capital, margin and segregation requirements (the SEC Rules) for SBS dealers (SBSDs) and major SBS participants, revised the capital and segregation requirements for broker-dealers that are not SBSDs to the extent they engage in SBS…
Continue Reading
Davis Polk Client Memorandum: SEC and FINRA Staffs Highlight Broker-Dealer Regulatory Challenges Raised by Digital Assets—And Hint at Solutions
Broker-dealer custody of on-blockchain assets has been a key hurdle in the development of a more regulated financial infrastructure for digital assets in the United States. In a joint statement (the Joint Statement), the staffs of the SEC and FINRA outlined their concerns about broker-dealers’ ability to comply with…
Continue Reading
Davis Polk Visual Memorandum: SEC Adopts Regulation Best Interest, Form CRS and Related Advisers Act Interpretations
The SEC adopted its long-awaited Regulation Best Interest, establishing new standard of conduct regulations for SEC-registered broker-dealers and their associated persons that are natural persons. At the same time, the SEC adopted (i) a new relationship summary disclosure requirement, on Form CRS, for broker-dealers and investment advisers who offer services…
Continue Reading
SEC Staff Doubles Down on Howey for Digital Assets
Last week, the SEC staff published new detailed guidance on its views of when a digital asset may be considered a security, in the form of two documents: a guidance “framework” issued by the SEC’s Strategic Hub for Innovation and Financial Technology and a no-action letter from the SEC’s Division…
Continue Reading
Chairman Jay Clayton and Director Brett Redfearn Preview Potential Further Equity Market Structure Reforms—Exchange Market Data Business Model Targeted
Posted in Broker-Dealer, SEC
Earlier this month, SEC Chairman Jay Clayton and Division of Trading and Markets Director Brett Redfearn engaged in a public dialogue on equity market structure issues. In addition to reviewing three equity market structure initiatives adopted by the SEC in 2018 (the transaction fee pilot, enhanced order handling …
Continue Reading
SEC Adopts Enhanced Order Handling Disclosure Requirements
The SEC recently voted to adopt amendments to Rule 606 of Regulation NMS (the “Final Rule”) that expand broker-dealers’ disclosure obligations with regard to how they handle investors’ orders. Specifically, the Final Rule requires broker-dealers, beginning May 20, 2019, (i) to provide, upon request, individualized reports in a…
Continue Reading
Regulators Step Up Enforcement on Crypto Firms
After a several month lull that led some to question the SEC’s focus on crypto enforcement, this week saw a spate of enforcement activity involving crypto assets: several SEC enforcement actions, an SEC trading suspension order, the first FINRA cryptocurrency enforcement action, and a preliminary court decision consistent with the…
Continue Reading
The CAT Nap Continues
Posted in Broker-Dealer, SEC
The Director of the SEC’s Division of Trading and Markets, Brett Redfearn, recently provided an update on the status of the consolidated audit trail (the “CAT”), which is being developed by the SROs and Thesys Technologies, LLC, the CAT plan processor. The public statement noted that although the…
Continue Reading
SEC Proposes Equity Market Study: Beginning of the End for the Maker-Taker Model?
In the first major trading and markets initiative under SEC Chairman Jay Clayton, on March 14, 2018, the SEC proposed to establish a transaction fee pilot program to study the effects of maker-taker fee structures. A pilot study was initially recommended by the SEC’s Equity Market Structure Advisory Committee in…
Continue Reading