Month: January 2011

Know-Your-Customer and Suitability Obligations

SEC approves consolidated FINRA rules governing Know Your Customer (Rule 2090) and Suitability Obligations (Rule 2111), effective October 7, 2011. Know Your Customer In general, new FINRA Rule 2090 (Know Your Customer) is modeled after former NYSE Rule 405(1) and requires firms to use “reasonable diligence,” in regard to the opening and maintenance of every account, to …

Know-Your-Customer and Suitability Obligations Read More »

Proposed Rule: Net Worth Standard for Accredited Investors – Release 9177

On January 25, 2011, the Securities and Exchange Commission proposed a revised net worth standard as required under the Dodd-Frank Street Reform and Consumer Protection Act in Securities Act Release Number 9177. The SEC has requested comments by March 11, 2011. The link above is a summary of the important proposals of the SEC’s Release …

Proposed Rule: Net Worth Standard for Accredited Investors – Release 9177 Read More »

SEC Extends with Additional Conditions the No Action Letter for Broker-Dealers Relying on Registered Investment Advisers for Customer Identification Program

The SEC Division of Trading and Markets extended, but amended by increasing the conditions, for broker-dealers relying on registered investment advisers to perform customer identification program (“CIP”) requirements. On January 11, 2011, the SEC agreed to extend for two years the position taken in a 2004 No-Action Letter (and subsequent extensions in 2005, 2006, 2008 and …

SEC Extends with Additional Conditions the No Action Letter for Broker-Dealers Relying on Registered Investment Advisers for Customer Identification Program Read More »

Proposed Amendments to FINRA Rule 5122 Addressing Private Placements – Regulatory Notice 11-04

FINRA issued a proposed amendment to Rule 5122 requiring disclosure in the offering document of the intended use of offering proceeds, expenses, and the amount of selling compensation to be paid to he broker-dealer and its associated persons, in any private placement in which a participating broker-dealer (or its control entity) is the issuer. In …

Proposed Amendments to FINRA Rule 5122 Addressing Private Placements – Regulatory Notice 11-04 Read More »

SEC Issues Compliance Extension to Part 2B of Form ADV and the Brochure Supplement

On December 28, 2010, the Securities and Exchange Commission issued Release No. IA-3129, which among other things extended the compliance date for Part 2B of the Form ADV, the brochure supplement and rules related to delivery of the supplement for registered investment advisers under the Investment Advisers Act of 1940. Background Previously, the SEC adopted amendments …

SEC Issues Compliance Extension to Part 2B of Form ADV and the Brochure Supplement Read More »