News & Events – Compliance and Regulatory Alerts

SEC Exams Division staff issued a new risk alert on June 8, 2023, noting they will be reviewing additional Marketing Rule areas of emphasis.

On March 27, 2023, the SEC Division of Examinations issued a Risk Alert focused on compliance deficiencies found in examinations of newly registered advisers. The Division said these advisers may face unique risks, particularly as to conflicts of interest, and cautioned them to review their policies and procedures, disclosures, and marketing practices. The Division also explained—perhaps as guidance for these new registrants—that their examinations were “an opportunity for early engagement between advisers and the staff.” Bates has a brief summary of this new Alert and what it could mean for your firm and clients.

FINRA proposed amendments to the Codes of Arbitration Procedures for Customer Disputes and Industry Disputes that would affect the arbitrator list selection process. The proposed amendments would also make clarifying changes on administrative practices. 

The Securities and Exchange Commission’s Division of Examinations has just released its 2023 examination priorities report, providing insights into its risk-based approach, including the areas it believes present potential risks to investors and the integrity of the U.S. capital markets. Stay tuned for our annual commentary and chart, coming soon, on the SEC's 2023 priorities and how they may impact your legal, regulatory and compliance matters.

Businesses that are interested in engaging in virtual currency activities in Louisiana must now take steps to file for a license from the state. Read our new alert for details and a link to the new license application checklist.

FINRA has announced the publication of the 2023 Report on FINRA's Examination and Risk Monitoring Program. The comprehensive report from FINRA’s regulatory operations covers 24 topics relevant to the evolving securities industry. Additionally, the report introduces a new Financial Crimes section highlighting FINRA’s increased focus on protecting investors and safeguarding market integrity against these ongoing threats. Stay tuned for our annual commentary, coming soon, on FINRA’s 2023 objectives and how they may impact your legal, regulatory and compliance matters.

FINRA has remained focused on ensuring that eligible customers received Rights of Reinstatement (“ROR”) benefits where appropriate. Just recently, we were retained by another large firm looking to leverage the depth of our experience gained through many engagements assisting our clients with Rights of Reinstatement issues since the targeted examination announcement in 2020. Contact Bates today if you are facing a FINRA inquiry or other action or need to update your policies and procedures.

FINRA is conducting a targeted review of brokerage firms' systems and procedures for providing customers waivers and rebates available through Rights of Reinstatement (RoR) on mutual fund purchases. As part of this review, FINRA will request each firm that receives this information request respond to certain questions with respect to the period of January 1, 2017 through June 30, 2020.

The SEC Enforcement Division is continuing to concentrate on firms that did not self-report by the deadline of the SEC’s Share Class Selection Disclosure Initiative, and is now focusing on revenue-sharing payments and other forms of representative compensation or cost offsets. Bates takes a look at recent SEC actions and settlements with comments and recommendations by Securities Litigation and Regulatory Enforcement Managing Director Alex Russell.

The SEC's Enforcement Division has now initiated investigations against firms that did not self-report by the deadline of the SEC’s Share Class Selection Disclosure Initiative. Whether you are facing an enforcement or remediation effort, Bates can help.

Firms participating in FINRA’s 529 Plan Share Class Initiative should act now to meet the regulator’s approaching April 1st deadline to self-report violations and submit a plan to remediate harmed clients. Bates looks at four distinct challenges facing firms as they prepare their response.

On the heels of the SEC’s 12b-1 Share Class Initiative, FINRA just announced its own Share Class Initiative. FINRA’s Share Class Initiative sets a deadline of April 1, 2019 for firms to self-report 529 savings plan share class violations and to provide FINRA with a plan to remediate harmed clients.

Bates Group has deep and proven experience and expertise in share class disclosure matters. To support firms facing FINRA’s 529 Plan disclosure and remediation initiative, we have created a plan that provides essential end-to-end steps and solutions to identify and address accounts and clients impacted by share class selection.