FINRA Releases 2018 Annual Regulatory and Examinations Priorities

Posted in FINRA, Technology

As it does every January, FINRA released its annual Regulatory and Examinations Priorities Letter identifying areas of examination focus for the coming year, recurring challenges faced by firms, and possible risks impacting the financial sector. FINRA’s 2018 exam priorities for the first time identify cryptocurrencies and related initial coin offerings (ICOs). Other first-mentions include technology governance, business continuity plans, and non-purpose loans. FINRA’s highest listed priorities this year are the repeated priorities of fraud and recidivist brokers.

Protecting senior investors was a prominent part of FINRA’s Exam Priorities in 2014, 2015, 2016, and 2017. In 2018, protection of seniors was not a delineated priority issue but permeated most all other topics.

Despite the fact that FINRA has announced a more strategic use of its resources, most of the old favorites make an appearance including suitability, AML, and cybersecurity.

For more information, please read the GT Alert “FINRA’s 2018 Annual Regulatory and Examination Priorities.”

Financing Bitcoin: The Problem of Actual Delivery

Posted in Blockchain, Blockchain Technology Task Force, CFTC

The CFTC has asserted that Bitcoin is, and other virtual currencies may be, commodities under the Commodity Exchange Act.   As such, pursuant to Section 2(c)(2)(D) of such Act, “off exchange” financed retail transactions in virtual currency are prohibited unless an exception applies.   One exception found in Section 2(c)(2)(D)(ii)(III)(aa) provides, in relevant part, that such a prohibition shall not apply to a “contract of sale that results in actual delivery [of the commodity] within 28 days.”  On December 15, 2017 the CFTC issued a proposed interpretation and requested comments on the meaning of “actual delivery” in the context of virtual currencies and retail financed transactions.

This GT Advisory discusses whether secured financing can be maintained while satisfying the CFTC’s interpretation of “actual delivery”.  Moreover, the advisory considers whether the “actual delivery exception” is available for retail finance transactions that are not “contracts of sale.”

To read the full GT Advisory, please click here.

 

NY Department of Financial Services Proposes its Own Fiduciary Rule in Response to U.S. DOL Delay

Posted in Financial Regulation, Retirement

In February, President Trump signed an Executive Order directing the U.S. Department of Labor (DOL) to review the fiduciary rule for brokers that President Obama’s Labor Department adopted. The federal rule would expand the definition of “investment advice” in the retirement context and require brokers to provide advice that is in the consumer’s best interest. While the federal fiduciary rule is under review, the U.S. DOL delayed some of the rule’s requirements until July 1, 2019. In response, Governor Cuomo announced that the New York Department of Financial Services (DFS or Department) proposed a rule requiring brokers to put their customers’ best interests first in life insurance and annuity transactions.

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Will Patent Sharing Organizations Boost Blockchain Innovation?

Posted in Blockchain

Companies across many different industries are starting to look toward blockchain technology as a way to conduct business more effectively, efficiently, and securely. As a result, there are new blockchain technology startups and strategic partnerships being established at break-neck speed. And, like any burgeoning industry, there seem to be new innovations introduced almost every day.

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Greenberg Traurig’s Nanette Aguirre to Speak at Florida Alternative Investment Association Global Macro Perspective 2018

Posted in Events

Nanette Aguirre, corporate shareholder, will participate in the Florida Alternative Investment Association (FLAIA) Global Perspective 2018 Conference in Miami, FL, Dec. 5. Aguirre will participate as a speaker and provide an update on developments in current regulation and market trends. Aguirre is joined by a series of panelists from private funds who will address the global trading market. Greenberg Traurig is a sponsor of the program. Aguirre is a board member of FLAIA.

Greenberg Traurig Shareholders Jennifer Weddle and Gil Rudolph to Speak at 2017 Tribal Financial Regulators Conference

Posted in Events, Financial Regulation

Jennifer Weddle and Gil Rudolph, Greenberg Traurig, LLP shareholders, will participate in the 2017 Tribal Financial Regulators Conference in Minneapolis, Nov. 30. Rudolph and Weddle will speak in the session titled “Hot Topics in Federal Consumer Protection and Best Practices for Addressing All That is in Third Party Vendor Contracts.” The conference brings together tribal financial regulators who engage in consumer lending and other financial services from tribes throughout the country.

Greenberg Traurig’s Nanette Aguirre to Speak at Minorities in Restructuring and Alternative Investments Networking Event

Posted in Events, Fintech, Technology

Nanette Aguirre, Corporate Shareholder, will participate in the Fall 2017 Minorities in Restructuring and Alternative Investments (MRAI) Networking event in New York, NY, Nov. 30. Aguirre will participate in the program titled “Industries of the Future: How new technology and thinking will come of age and disrupt the status quo.” A panel of distinguished speakers from an array of leading private funds and financial institutions will address how their internal teams and investors are making demands in the Fintech space (blockchain/smart contracts) and the regulatory developments affecting new technology. Aguirre is a board member of MRAI.

Greenberg Traurig’s Maria Sendra to Speak at Blockchain Expo North America 2017

Posted in Blockchain, Events

Maria Sendra, a shareholder in the Silicon Valley office of global law firm Greenberg Traurig, LLP, will speak at Blockchain Expo North America 2017, at the Santa Clara Convention Center. The expo will feature interactive panel discussions and solution-based case studies with a focus on learning and building partnerships in the emerging blockchain space, and will explore the industries that are set to be disrupted most by this new technology. Sendra will participate in the “What are the Regulatory Implications of Using Blockchain Technologies,” panel Nov. 29. Greenberg Traurig is also a sponsor of the expo.

Richard Cordray Resigns — Who’s going to mind the CFPB store?

Posted in CFPB, Government

With the announcement of Richard Cordray’s resignation as Director of the federal Consumer Financial Protection Bureau (CFPB) by the end of November 2017, the latest D.C. guessing game is who will take over the helm of the CFPB. This simple question is really two questions. First, who will run the agency on an interim basis? Second, who will President Trump nominate to be the permanent Director, a position requiring Senate confirmation? This second question will likely be the subject of much political discussion and may not be answered for months.

To read more, please see GT AlertRichard Cordray Resigns – Who’s going to mind the CFPB store?

Regulators Weigh in on Digital Assets, Tokens, Securities, and Derivative Instruments Used in ICOs

Posted in Blockchain, Blockchain Technology Task Force, CFTC, SEC, Virtual Currency

The rise of blockchain technology ventures raising money preternaturally through initial coin offerings and token generation events (collectively, ICOs) is a capital formation disruptor, one which has and will continue to spawn considerable futures, fortunes, failures — and frauds. Blockchain-based ICOs have, through 121 offerings closed during January-August 2017, raised over $1.78 billion, with an expected amount at year-end 2017 of over $3 billion according to publicly-available estimates. While IPOs raised about $12 billion (and startups $22 billion) thus far in 2017, the amount raised through ICOs is impressive for a new asset class. By some sources ICOs have exceeded angel, venture capital, and seed funding reported during some months of 2017. The shrouded world of blockchain technology and range of offerings masks identities and sourcing of investors in ICOs. It is speculated that funds have been primarily sourced from early investors profiting in cryptocurrency technologies.

To learn more, please click here.

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