Washington Report 360 | April 27, 2018 | KPMG | US
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Washington Report 360 | April 27, 2018

Washington Report 360 | April 27, 2018

In this issue...

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Key Highlights

Continued heightened regulatory focus on conduct:

  • The Financial Stability Board published a toolkit to assist firms and supervisors in addressing misconduct.
  • The SEC intends to conduct a series of roundtables focused on retail investors and standards of conduct for investment advisers and broker-dealers.
  • FINRA proposes to remove limitations to proving excessive trading in customers’ accounts.

Financial services policy news

The Financial Stability Board published a toolkit to assist firms and supervisors in addressing misconduct based on mitigating cultural drivers of misconduct, strengthening individual responsibility and accountability, and addressing “rolling bad apples.”

The Financial Stability Board published a second consultation paper on the proposed governance arrangements for a unique product identifier.

The SEC announced plans to conduct a series of roundtables on its proposed rules addressing standards of conduct for investment advisers and broker-dealers when working with retail investors.

The CFTC released a white paper assessing its implementation of swaps reform, identifying strengths and deficiencies, and recommending improvements to the swaps reform framework.

The CFTC’s FinTech initiative, LabCFTC, requested public input on focus areas for potential innovation competitions and maximizing the impact of those competitions in stimulating innovation.

The CFTC Divisions of Clearing and Risk, Market Oversight, and Swap Dealer and Intermediary Oversight stated that “manufactured credit events may constitute market manipulation,” adding that “the Divisions will carefully consider all available actions to help ensure market integrity and combat manipulation or fraud involving CDS.”

The U.S. Treasury Department released a report on its regulatory reform efforts and accomplishments.

Financial services legislative and regulatory news

FINRA issued proposals to:

  • Revise the quantitative suitability obligation under FINRA Rule 2111 (Suitability) to remove the element of control that currently must be proved to demonstrate excessive trading in customers’ accounts.
  • Amend FINRA Rule 3310 (Anti-Money Laundering Compliance Program) to conform to FinCEN's final rule on Customer Due Diligence Requirements;
  • Extend the implementation date of the amendments to FINRA Rule 4210 (Margin Requirements);
  • Amend FINRA Rule 6433 (Minimum Quotation Size Requirements for OTC Equity Securities) to permanently adopt the piloted minimum quotation sizes;
  • Request comment on the effectiveness and efficiency of Rule 3110 (Supervision), which governs annual compliance meetings.

FINRA published a progress report on the operational and regulatory changes made in the first year of FINRA360.

The BCBS issued its fourteenth progress report on the adoption of the Basel regulatory framework noting progress in adoption of the leverage ratio, the Net Stable Funding Ratio, and the revised securitization framework, but reporting limited progress in some technical areas.

The CFPB issued a final rule amending its Know-Before-You-Owe mortgage disclosure rules related to passing on increased closing costs to consumers.
 

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