Broker Dealer Regulatory Digest

Editor's Note
The following newsletter provides a roundup summarizing enforcement actions, guidance, rulemakings, and other public statements taken by a federal and/or state financial services regulatory agency, specifically focusing on: (1) the source of the development (regulator, legislative body, etc.), (2) the subject matter (consumer lending, money transmission, capital markets, etc.), and (3) the general issue covered.

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Regulatory Developments

• Securities and Exchange Commission. Regulatory Examinations. SEC's Division of Examinations published its 2024 examination priorities.
• Securities and Exchange Commission. Broker Dealer. SEC issued a proposed rule (see fact sheet) to prohibit national securities exchanges from offering volume-based transaction pricing in connection with the execution of agency-related orders in certain stocks. The deadline for comments is 60 days after publication in the Federal Register. Separately, Chair Gensler, Comm'r. Crenshaw and Comm'r. Lizárraga gave statements in support of proposed changes, while Comm'r. Pierce and Comm'r. Uyeda dissented.
• Financial Industry Regulatory Authority. Broker Dealer. FINRA amended its by-laws to exempt from the Trading Activity Fee (TAF) any transaction by a proprietary trading firm that occurs on an exchange of which the proprietary trading firm is a member, effective November 6, 2023.
• Commodity Futures Trading Commission. Enforcement. CFTC's Division of Enforcement published an advisory designed to give enforcement staff guidance on future enforcement resolution recommendations to the agency. Additionally, Comm'r. Goldsmith Romero released a statement in support of the advisory.
• Commodity Futures Trading Commission. No-Action Letter (NAL). CFTC's Division of Market Oversight issued an NAL extending the no-action position taken in CFTC Letter No. 22-03 regarding compliance dates for certain amendments, adopted in November 2020, to the agency's swap data reporting rules concerning block trades and post-initial cap sizes. Separately, Comm'r. Mersinger and Comm'r. Pham published a joint statement in support of the action, but expressing some concerns and their perspectives on how the agency should proceed going forward on this topic.
• Commodity Futures Trading Commission. Deliberative Process Privilege. CFTC Comm'r. Pham gave a statement on the deliberative process privilege.
• Commodity Futures Trading Commission. Memorandum of Understanding (MOU). CFTC and the French Autorité des marchés financiers (AMF) signed an MOU regarding cooperation and the exchange of information in the supervision and oversight of certain regulated firms that operate on a cross-border basis in the United States and in France. Comm'r. Johnson issued a statement in support of the MOU.

Enforcement and Litigation

• Commodity Futures Trading Commission, North American Securities Administrators Association, & Multi-State. Elder Financial Exploitation & Fraud. CFTC and 30 state securities regulatory agencies that are members of NASAA announced the entry of a consent order in federal court against a firm and an individual, finding them liable for operating a nationwide $68 million fraudulent scheme, involving the sale of fraudulently overpriced silver coins that targeted elderly and retirement-aged people for financial exploitation.
• Commodity Futures Trading Commission. Futures & Commodities. CFTC published an order filing and settling charges against a company for allegedly attempting to manipulate the price of July 2016 and March 2017 oats futures contracts. Separately, Comm'r. Goldsmith Romero and Comm'r. Johnson gave a statement in support of the action.

Michael Buckalew is a regulatory analyst with Davis Wright Tremaine LLP.