May 22, 2020

FINRA Issues Notice Reminding Firms of Sales Practice Obligations for Certain Exchange-Traded Products

On May 15, 2020, FINRA issued Regulatory Notice 20-14 (Notice) in response to recent “extraordinary conditions” that have caused significant volatility in complex oil-linked exchange-traded products (ETPs). The Notice reminds broker-dealers that are members of FINRA (firms) of their sales practice obligations in connection with these ETPs and, similar to…

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May 21, 2020

SEC Charges Three Former Audit Firm Partners for Exam Sharing Misconduct

On May 18, 2020, the SEC entered into settlement agreements with three former partners of an independent public accounting firm (Firm) in connection with the partners’ conduct involving improperly receiving and sharing information about internal continuing professional education exams conducted by the Firm. The former partners participated in soliciting or…

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May 15, 2020

ETF Sponsors Submit Letters to Major Exchanges Regarding ETP Categorization

On May 13, 2020, a group of six ETF sponsors submitted letters to Cboe Global Markets, Inc., NASDAQ, and Intercontinental Exchange Inc. (the parent of NYSE Arca) urging that each exchange adopt exchange listing rules or other means to categorize exchange-traded products (ETPs) differently (ETP Letter).  The ETP Letter proposes…

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May 4, 2020

Major Exchanges for ETFs Receive Approval for Generic Listing Standards for ETFs that Can Rely on Rule 6c-11

Cboe BZX Exchange, Inc. (Cboe), The Nasdaq Stock Market LLC (NASDAQ) and NYSE Arca, Inc. (NYSE) received approval from the SEC’s Division of Trading and Markets (Division) to adopt rules that establish generic listing standards to permit the listing and trading of ETFs that can rely on Rule 6c-11 under…

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May 4, 2020

SEC Fines Fund Adviser for Overvaluing its Securities and Misleading Performance Disclosures

On April 28, 2020, the SEC fined a fund’s adviser in a consent order (Order) for the adviser’s conduct involving the fund’s overvaluation of its securities and the adviser’s misleading statements about the fund’s performance in shareholder communications. The fund primarily invested in non-agency mortgage-backed securities (NA MBS) and, during…

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