Tag: United States

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United States: A Holiday Gift for M&A Brokers: Congress Passes New Exemption from Securities Broker Registration
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United States: PCAOB’s Vacating 2021 Determination under HFCAA Lowers the Risk of Delisting
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United States: SEC Proposes Regulation Best Execution
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United States: SEC Throws a Flag on Red Flags Programs
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Australian Regulatory Update – 14 November 2022

United States: A Holiday Gift for M&A Brokers: Congress Passes New Exemption from Securities Broker Registration

By: Eden L. Rohrer and Jessica D. Cohn

On December 23, 2022, the House of Representatives passed H.R. 2617, the “Consolidated Appropriations Act of 2023,” following Senate passage on December 22.   President Biden is expected to sign the legislation before December 30.  Among the routine federal funding provisions, the bill includes a holiday surprise “policy rider” on qualifying mergers and acquisitions brokers (“M&A brokers”) in Division AA, Title V, Small Business Mergers, Acquisitions, Sales and Brokerage Simplification (“Title V”), effective 90 days after enactment. (H.R. 2617, 117th Cong. Div. AA, Title V, § 501 (2022)).

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United States: PCAOB’s Vacating 2021 Determination under HFCAA Lowers the Risk of Delisting

By: Yuki Sako and Michael G. Lee

On 15 December 2022, the Public Company Accounting Oversight Board (PCAOB) announced that it was able to secure complete access to inspect and investigate audit firms in China. From September to November 2022, PCAOB staff members “conducted on-site inspections and investigations in Hong Kong…thoroughly testing all aspects of the agreement necessary to assess whether [Chinese] Authorities would allow complete access.” The PCAOB’s inspections and investigations were pursuant to a written agreement, called the Statement of Protocol, which the PCAOB entered into with Chinese authorities on August 26, 2022. The PCAOB concluded that Chinese authorities “did not obstruct the PCAOB’s ability to inspect and investigate completely, consistent with U.S. law.” Consequently, the PCAOB decided to vacate its previous December 16, 2021 determination, made pursuant to the Holding Foreign Companies Accountable Act (HFCAA), that positions taken by China prevented the PCAOB from inspecting and investigating firms headquartered in mainland China and Hong Kong completely.

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United States: SEC Proposes Regulation Best Execution

By: Stacy L. Fuller and Nicholas O. Ersoy

On December 14, 2022, the U.S. Securities and Exchange Commission (“SEC”) proposed Regulation Best Execution (“Regulation Best Ex”) under the Securities Exchange Act of 1934, as amended.  Regulation Best Ex would generally impose requirements on broker-dealers to use reasonable diligence to ascertain the best market for a security transaction and buy or sell in such market so that the resultant price to the customer is as favorable as possible under prevailing market conditions, subject to certain exemptions. For over half-of-a-century most broker-dealers have been subject to the Financial Industry Regulatory Authority’s best execution rule 5310, but if Regulation Best Ex is adopted, the SEC would begin to regulate best execution directly.

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United States: SEC Throws a Flag on Red Flags Programs

By: Jessica D. Cohn and Keri E. Riemer

On 5 December 2022, the staff of the Division of Examinations (Staff) of the Securities and Exchange Commission (SEC) issued a risk alert identifying practices that are inconsistent with Regulation S-ID, thereby exposing retail customers to potential identity theft.

Regulation S-ID, which applies to SEC-regulated entities that are financial institutions or creditors under the Fair Credit Reporting Act (including most registered broker-dealers, registered investment companies and registered investment advisers), requires the establishment of programs designed to detect, prevent, and mitigate identity theft in connection with covered accounts (each, a Program). Programs must include reasonable policies and procedures to identify, detect, and respond to red flags relevant to identity theft.

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Australian Regulatory Update – 14 November 2022

By Jim Bulling and Anabelle Weinberg

1. Bitcoin plunges as FTX Trading files for bankruptcy – calls for more transparency from crypto exchanges

Bitcoin has plunged following the fall of FTX Trading (FTX). It remains unclear when or if traders will be able to recoup their money from FTX.

In response to the collapse of FTX and in an effort to retain confidence in their platforms, a number of large crypto exchanges have published Proof of Reserves showing that the levels of assets that they hold match their liabilities to customers.

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