SEC Rulemaking & Guidance

SEC Approves Amendments to Reg NMS

• On September 18, the SEC adopted amendments that:
  • Establish a second minimum pricing increment, also known as tick size, of $0.005 under Rule 612 of Regulation NMS for the quoting of certain NMS stocks;
  • Reduce the access fee caps under Rule 610 of Regulation NMS and require national securities exchanges to make the amounts of all fees and rebates determinable at the time of execution; and
  • Accelerate the implementation of the round lot and odd-lot information definitions adopted in 2020 under the Market Data Infrastructure Rules and add information about the best odd-lot order to the definition of odd-lot information.
• Compliance Date: The amendments will become effective 60 days after the date of publication of the adopting release in the Federal Register. For Rule 612, Rule 610, and the round lot definition, the compliance date will be the first business day of November 2025. For odd-lot information, the compliance date will be the first business day of May 2026.
• The press release, fact sheet, and adopting release are available here:

https://www.sec.gov/newsroom/press-releases/2024-137

 SEC Approves a New PCAOB Quality Control Standard

• On September 9, 2024, the SEC approved the Public Company Accounting Oversight Board’s (PCAOB) new quality control (QC) standard and related amendments to its standards, rules and forms.  QC 1000, A Firm’s System of Quality Control, establishes an integrated, risk-based quality control standard that requires all registered public accounting firms to identify specific risks to their practice and design a quality control system that includes appropriate responses to guard against those risks.
• Compliance Date:  QC 1000 and the related amendments to other PCAOB standards, rules, and forms will take effect on Dec. 15, 2025.
• The press release and SEC Order are available here:

The press release and SEC Order are available here. 

SEC Investor Advisory Committee – Update

• On September 19, the SEC’s Investment Advisory Committee (IAC) held their fall meeting.  The meeting included a panel discussion regarding investment advice, and a panel discussion regarding key topics from securities litigation: shareholder proposals & “tracing” in section 11 litigation.
• Meeting materials are available here: https://www.sec.gov/about/advisory-committees/investor-advisory-committee
• On September 10, 2024, the SEC announced six new members to fill vacancies on its Investor Advisory Committee.  The new members, who will serve four-year terms, join 17 current committee members. 
• The press release, including the list of new members is available here:  The press release, including the list of the six new IAC members, is available here.

FINRA

PODCAST – FINRA’s Examination Program: Optimizing for the Future

• On September 3, FINRA posted a podcast – FINRA’s Examination Program: Optimizing for the Future.  In this podcast, Michael Solomon, EVP of Examinations and the Membership Application Program, Tom Mellett and John Martino, each a VP of Firm Group Examinations, detail some of the recent changes, including the introduction of thematic reviews, changes to the post-exam closeout process and more.
• The podcast is available here:

The announcement and link to the podcast are available here.

 Regulatory Notice 24-11: FINRA Publication of Updated Interpretations of FINRA’s Margin Rule

• On August 9, FINRA published a set of interpretations of the margin rule. FINRA also provided a guide to the updated interpretations; the guide includes a text comparison with the previous interpretations and other information about the updates.   
• FIINRA Reg Notice 24-11 is available here:

https://www.finra.org/rules-guidance/notices/24-11

• The updated interpretations are available at:

Interpretations of Rule 4210.   

Crypto

SEC Chief Accountant’s Remarks on Accounting for Crypto-Asset Safeguarding Obligations

• On September 9, 2024, Paul Munter, Chief Accountant of the SEC, provided remarks addressed Staff Accounting Bulletin No. 121 (“SAB 121”), which pertains to accounting by entities with obligations to safeguard crypto-assets held for their platform users.
• Statement is available here:

Mr. Munter’s remarks are available here. 

FINRA Cybersecurity Advisory – Increasing Cybersecurity Risks at Third-Party Providers

• On September 9, FINRA provided a cybersecurity advisory that includes:
  • background on member firms’ practice of contracting with third-party providers;
  • an overview of the current regulatory landscape associated with third-party provider risks;
  • an overview of the threat landscape concerning third-party providers used by member firms; and
  • effective practices and resources to assist firms in mitigating risk in this area.
• The Advisory is available here:

The advisory is available here. 

FINRA Provides Update on Member Firms’ Crypto Asset Activities

• On August 13, FINRA provided an update on member firm crypto asset activities.  The themes they identified related to member firms and their affiliates’ crypto asset activities based on a review of information provided by member firms in response to the 2018, 2019 and 2021 notices and the 2023 crypto asset questionnaire, as well as information collected by FINRA through its ongoing regulatory operations.
• The update is available here:

https://www.finra.org/rules-guidance/guidance/crypto-assets-update 

US Department of Labor Updates Cybersecurity Guidance for Plan Sponsors, Fiduciaries, Recordkeepers, Plan Participants to Protect Info, Assets

• On September 6, the DOL updated their cybersecurity guidance, confirming it applies to all types of plans governed by ERISA, including health and welfare plans, and all employee retirement benefit plans.  The release updates their 2021 guidance and includes (1) Tips for Hiring a Service Provider, (2) Cybersecurity Program Best Practices, and (3) Online Security Tips for plan participants.
• The guidance complements EBSA’s regulations on electronic records and disclosures to plan participants and beneficiaries, including provisions on ensuring electronic recordkeeping systems have reasonable controls, adequate records management practices are in place and electronic disclosure systems include measures calculated to protect Personally Identifiable Information.
• The guidance is available here:

The news release is available here.

Retirement

ERISA Advisory Council – September Meeting

• On September 10-12, the ERISA Advisory Council held their September meeting, which included its review of two topics: “Making Welfare Plan Claims and Appeals Procedures More Accessible to Participants”, and (2) “Lifetime Income and Qualified Defined Investment Alternatives.”
• More information about the Advisory Council is available here:

https://www.dol.gov/newsroom/releases/ebsa/ebsa20240906