News & Events – Bates Research

In a recent Staff Bulletin, SEC staff clarified care obligations for broker-dealers and investment advisers towards retail clients. Both the Reg BI and fiduciary standards share the same principles and responsibilities towards retail investors, narrowing the differences between the two.

The Money Transmission Modernization Act (MTMA) was created to modernize the money transmission industry by allowing for comprehensive standards and requirements that reduce regulatory burden and encourage innovation, and improved consumer protections that allow for less confusing rules across states. In this article, we look at the three key benefits of the MTMA, as well as the current attitude of state legislatures toward its adoption.

FINRA and the SEC are increasingly focused on manipulative trading practices, such as wash sales and front running, due to an uptick in these violations and the regulators' use of advanced data analytics to detect potential market abuses.

OFAC has recently made updates to its website designed to make it easier for users to find guidance on specific industries, use the reporting system, stay current on policy updates, and access OFAC's sanctions database quickly and efficiently.

Download this illustrative and detailed chartbook featuring U.S. economic and capital markets analysis for 2022. From Bates Group Director Greg Kyle and President Ben Pappas.

The Consumer Financial Protection Bureau (CFPB) engages in rigorous examinations of financial institutions to ensure that they follow all applicable laws and regulations, have effective compliance management systems in place, and provide meaningful consumer protections. Bates Group offers independent consumer compliance reviews to help protect your business and customers.

In response to the threat from cyber actors “who use constantly evolving and sophisticated tactics, techniques, and procedures to cause harmful cybersecurity incidents,” the SEC proposed a new set of comprehensive rules intended to mitigate that risk. The proposal is consistent with the White House’s recent announcement of a new comprehensive National Cybersecurity Strategy and the annual FBI report on cybercrime trends based on 2022 data. Bates has the details.

Fast-moving events in the financial markets are underscoring the need for a workable digital asset legislative and regulatory framework. Ongoing volatility continues to reduce overall crypto market value, and federal and state regulators have ramped up their enforcement efforts. Such volatility is the backdrop to this latest roundup on crypto developments.

In the aftermath of the collapse of three banking firms, Silvergate, Silicon Valley Bank and Signature Bank earlier in March, tensions in the banking sector continued over the past week with the shares of a number of regional banks including First Republic, PacWest Bancorp and Zions Bancorp under pressure. During the turmoil-filled week, several questions were raised about the strength of U.S. banks, whether regulators moved quickly enough, the role of VCs, and if the failures were foreseeable. Read the analysis from Bates Expert and Director Greg Kyle.

On Sunday, U.S. regulators seized Signature Bank, and on Friday, U.S. regulators seized the assets of Silicon Valley Bank (“SVB”). The seizure of SVB led to one of the largest bank failures in U.S. history and the largest failure of a financial institution since the 2008 financial crisis. The failure of SVB comes on the heels of Silvergate Capital announcing on Wednesday that it would voluntarily wind down operations and liquidate its bank. With three bank collapses in one week, the markets, investors, and many of our clients are understandably on edge.

Consumer protection laws are designed to protect consumers, to keep sellers honest and to protect purchases of goods from fraudulent or deceptive marketing. Consumer protection laws are enforced by the Federal Trade Commission, and businesses that fail to maintain compliance with federal consumer protection laws could face severe consequences.

In the coming months, the New Jersey legislature is expected to pass the Digital Asset and Blockchain Technology Act, a bill that would establish one of the broadest licensing and regulatory frameworks on digital assets in the country. The legislation is being closely watched as it offers companies a more comprehensive alternative to the current standard for the regulation of digital assets prescribed under New York law. Bates has a short summary and comparison chart.

Romance scams are a growing concern, as evidenced by The Federal Trade Commission’s report that romance fraud is one of the most costly forms of consumer fraud in the United States. Read the full article for the warning signs AML and Compliance professionals should look out for, as well as Elder Exploitation red flags and Bank Secrecy Act obligations.

In its latest annual report on examinations and risk monitoring, FINRA offered the regulator’s perspective on strengthening compliance programs on Reg BI and the corresponding Form CRS. FINRA included observations from its compliance reviews on each of the core duties under the two-plus-year-old rule. These areas were also the focus of an SEC Division of Examination Alert on broker-dealer compliance with Reg BI and a recent Bates webinar, cosponsored with NICE Actimize, discussing how broker-dealer firms are adapting their compliance programs in response to Reg BI. The insights offered from both the regulatory officials and the private consulting community offer perspective on what lies ahead. 

Are you a regulated financial institution that operates in New York? If so, it is important to familiarize yourself with the New York State's Department of Financial Services (DFS) Rule 504. The rule was put into place in 2017 and requires companies to establish anti-money laundering (AML) programs that meet the DFS’s specific and strict requirements, and to certify compliance with the regulation annually to the DFS. Bates has the details in this new article.