Tag: United States

1
United States: SEC Reopens Comment Period for Eleven Significant Rulemaking Releases
2
United States: As the WORM Turns: SEC Provides Alternative Recordkeeping Requirements for Brokers
3
United States: CFTC Proposes New Rules for Derivatives Clearing Organizations
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United States: CFTC Extends Position Limits Aggregation Relief
5
United States: SEC vs. Wahi: An Insider Trading Action with Surprising Impacts on the Investment Management Industry

United States: SEC Reopens Comment Period for Eleven Significant Rulemaking Releases

By: Trayne S. Wheeler and Brian Doyle-Wenger

On October 7, 2022, the Securities and Exchange Commission (the “SEC”) announced that, due to a technological error, it was reopening the public comment periods for 11 pending rulemaking releases (“Rulemaking Releases”) and one request for comment. The comment periods will be reopened as of October 7th and will end 14 days after the publication of the release in Federal Register (if, for example, this release were to be published on October 15, then the comment periods would close on October 29, 2022). The SEC encouraged commenters that submitted a public comment through the internet comment process to check the SEC’s website, SEC.gov, to determine whether their comment was received and posted.

The SEC’s release did not elaborate on nature of the technological error but stated that a number of public comments submitted through the SEC’s internet comment form were not received. The SEC noted the majority of the affected comments were submitted in August 2022, but that the technological error is known to have occurred as early as June 2021.

The impact of the reopening of the public comment periods is not yet known, but will likely result in delaying the release of a number of highly anticipated SEC rules[1].  The Rulemaking Releases include the following proposals and request for comment:

• Reporting of Securities Loans

• Prohibition Against Fraud, Manipulation, or Deception in Connection with Security-Based Swaps; Prohibition against Undue Influence over Chief Compliance Officers; Position Reporting of Large Security-Based Swap Positions

• Money Market Fund Reforms

• Share Repurchase Disclosure Modernization

• Short Position and Short Activity Reporting by Institutional Investment Managers; see also Notice of the Text of the Proposed Amendments to the National Market System Plan Governing the Consolidated Audit Trail for Purposes of Short Sale-Related Data Collection,    

• Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure

• Private Fund Advisers; Documentation of Registered Investment Adviser Compliance Reviews

• The Enhancement and Standardization of Climate-Related Disclosures for Investors

• Special Purpose Acquisition Companies, Shell Companies, and Projections

• Investment Company Names

• Enhanced Disclosures by Certain Investment Advisers and Investment Companies About Environmental, Social, and Governance Investment Practices

• Request for Comment on Certain Information Providers Acting as Investment Advisers

(Certain SRO rules, not covered here, also have comment periods that have been reopened.)


[1] SEC Release, Resubmission of Comments and Reopening of Comment Periods for Several Rulemaking Releases Due to a Technological Error in Receiving Certain Comments, October 7, 2022 (https://www.sec.gov/rules/proposed/2022/33-11117.pdf)

United States: As the WORM Turns: SEC Provides Alternative Recordkeeping Requirements for Brokers

By: Eden L. Rohrer, Chloe Vargas, and Raymond F. Jensen

On October 12, 2022, the SEC voted to adopt new electronic recordkeeping requirements for broker-dealers in an effort to modernize recordkeeping requirements and to allow broker-dealers to use new technologies to satisfy their obligations.  The new recordkeeping requirements will amend the Securities Exchange Act of 1934 (“Exchange Act”) Rule 17a-4 (“Rule 17a-4”) for broker-dealers and Exchange Act Rule 18a-6 (“Rule 18a-6”) for Security-Based Swap Dealers, and Major Security-Based Swap Participants.

Significant to broker-dealers is that they will no longer be required to preserve electronic records in a non-rewritable, non-erasable or read once, write many (“WORM”) format.   The new rule is technology neutral, allowing broker-dealers to adopt new technologies.  The amended rule will eliminate references to outdated technology such as “micrographic media,” “microfilm or microfiche,” and “optical disk technology (including CD-ROM),” in their heyday when the rule was adopted in 1997.

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United States: CFTC Proposes New Rules for Derivatives Clearing Organizations

By: Cheryl L. Isaac and Matthew F. Phillips

On July 27, 2022, the Commodity Futures Trading Commission (“CFTC”) proposed a series of amendments to the Commodity Exchange Act (the “Exchange Act”) designed to enhance its governance standards for Derivatives Clearing Organizations (“DCOs”).

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United States: CFTC Extends Position Limits Aggregation Relief

By: Cheryl L. Isaac and Michael G. Lee

On August 10, 2022, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) issued a no-action letter (NAL), CFTC Staff Letter No. 22-09 (NAL 22-09), temporarily extending relief regarding certain position aggregation requirements until the earlier of either August 12, 2025 or the effective date of any relevant rulemaking. This relief was first provided in CFTC Staff Letter No. 17-37 (NAL 17-37) on August 10, 2017, and subsequently extended in CFTC Staff Letter No. 19-19 (NAL 19-19) on July 31, 2019. The extended relief provided by NAL 19-19 was set to expire on August 12, 2022, two days before the issuance of NAL 22-09. The DMO stated that it would use the newly extended time to assess the impact of the relief, including whether it hinders the CFTC staff’s ability to conduct market surveillance, particularly in light of so many new contract markets and market participants becoming subject to the Position Limits for Derivatives Final Rule.  The CFTC will also consider a rulemaking process to codify the relief set forth in NAL 22-09.

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United States: SEC vs. Wahi: An Insider Trading Action with Surprising Impacts on the Investment Management Industry

By: Richard F. Kerr and Keri E. Riemer

The SEC has made a new crypto move – and its impact is broad.

As described in our FinTech Law Watch blog published on 29 July 2022, the SEC recently declared that 9 crypto assets were “securities” in a complaint relating to insider trading violations (Wahi Complaint).

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