Editor column

Citation

Davis, H.A. (2012), "Editor column", Journal of Investment Compliance, Vol. 13 No. 4. https://doi.org/10.1108/joic.2012.31313daa.001

Editor column

Article Type: Editor column From: Journal of Investment Compliance, Volume 13, Issue 4

We begin with an article by Russell Sacks and Michael Blankenship that discusses the US Securities and Exchange Commission’s (SEC’s) large trader reporting requirements, which are designed to provide the SEC with data to support its investigative and enforcement activities, as well as to facilitate the SEC’s ability to assess the impact of large trader activity on the securities markets including reconstructing trading activity following periods of unusual market volatility, and analyzing significant market events for regulatory purposes. Next Stuart Gelfond and Anthony Foti provide a preliminary explanation of “crowdfunding,” as defined in a key provision of the Jumpstart Our Business Startups (JOBS) Act that amends the securities laws to add a new registration exemption intended to permit companies to raise small amounts of capital from a large number of investors through the internet and social media. Martin Saunders and Chris Stott describe HM Treasury’s review of the UK’s “Money Laundering Regulations 2007,” recent enforcement actions taken by the Financial Services Authority and the Office of Fair Trading, and the UK government’s response to recent proposed revisions to the EU’s Third Money Laundering Directive, noting that taking action for breaches of anti-money laundering regulations remains high on the financial crime agenda of UK supervisory authorities.

James Brigagliano, Kevin Campion, David Katz and Andrew Blake explain the requirements of SEC Rule 613 under the Securities Exchange Act of 1934, which requires national securities exchanges and FINRA jointly to develop a national market system (NMS) plan that provides for the creation, implementation and maintenance of a consolidated order tracking system, or consolidated order trail, as well as the creation of a central repository responsible for the receipt, consolidation, and retention of all order and quote information for NMS securities.

The consolidated order trail is intended to provide a comprehensive and uniform tracking mechanism for secondary market activity in all NMS securities.

Anthony Nolan, Susan Gault-Brown and Lawrence Patent explain a final rule adopted by the SEC and the CFTC that clarifies Dodd-Frank Act definitions for the new terms “swap dealer,” “security-based swap dealer,” “major swap participant” and “major security-based swap participant, (together “Regulated Swap Entities”) and an amended definition of the term “eligible contract participant,” and the implications of those definitions. The adoption of the final rule is important to swap market participants because it provides firm definitional guidance on the criteria that make one a Regulated Swap Entity subject to registration with the CFTC and/or the SEC and the many responsibilities, obligations, and restrictions that come with substantive regulation, including capital and margin requirements, business conduct rules, conflict of interest rules, chief compliance officer requirements, reporting obligations, and recordkeeping requirements.

Ira Bogner, Robert Projansky, Steven Weinstein and Adam Scoll explain the US Department of Labor’s final regulations under Section 408(b)(2) of ERISA concerning information investment advisers to ERISA-covered pension plans and private investment funds deemed to hold the “plan assets” of ERISA-covered pension plans must disclose regarding the services they provide and the compensation they receive to such ERISA plans. Gordon Caplan, Jeffrey Korn, Robert Langdon, and Robert Stebbins highlight the importance of careful review and negotiation of confidentiality agreements in corporate transactions; they discuss certain issues that arose out of a recent confidentiality agreement in a case that involved a failed acquiror, a financial advisor, a private equity firm, and two acquisition target companies.

The issue concludes with two FINRA Regulatory Notices, Notice 12-29, Communications with the Public, and Notice 12-38, Short Interest Reporting.

Henry A. Davis