On Jan. 9, 2020, the Financial Industry Regulatory Authority (FINRA) released its 2020 Risk Monitoring and Examination Priorities Letter, in which it identifies its areas of examination focus for 2020. The cover note also highlights key changes in FINRA’s risk monitoring and examination program. These changes include the consolidation of FINRA’s three examination programs into a … Continue Reading
On Jan. 7, the SEC announced the publication of the annual Office of Compliance Inspections and Examinations (OCIE) 2020 Examination Priorities. In addition to the examination priorities themselves, the 28-page publication includes statistics related to OCIE’s 2019 examination program, touting OCIE’s completion of over 3,000 examinations covering ~15% of registered investment advisers and verification of … Continue Reading
In the summer of 2015, the New York State Department of Financial Services (DFS) finalized its regulatory framework for virtual currency firms seeking to conduct certain virtual currency (VC) business activities in the state. Since then, it has issued two dozen licenses and charters involving virtual currency transmission (VC licenses). To promote efficiency and reflect … Continue Reading
Welcome to the second issue of Greenberg Traurig’s LIBOR Transition Newsletter, which contains updates, analysis, and commentary on the latest developments relating to the highly anticipated phasing-out of LIBOR at the end of 2021 – barely two years from now. This issue covers the following: LSTA – Concept SOFR Credit Agreement Recent Developments Parting Shot … Continue Reading
Section 15 (a)(1) of the Securities Exchange Act of 1934 (Exchange Act) generally prohibits a broker or dealer from effecting “any transactions in, or to induce or attempt to induce the purchase or sale of, any security” unless such broker or dealer is registered with the Securities and Exchange Commission (SEC). However, as is often … Continue Reading
On Oct. 22, 2019, the U.S. House of Representatives, in a 249 to 173 vote, passed H.R. 2513, known as the “Corporate Transparency Act of 2019.” The Corporate Transparency Act, if enacted into law, would require each person who creates a corporation or limited liability company in the United States to report, on an ongoing basis, … Continue Reading
On Oct. 11, 2019, the Financial Crimes Enforcement Network (FinCEN), the U.S. Commodity Futures Trading Commission (CFTC), and the U.S. Securities and Exchange Commission (SEC), published a Joint Statement on Activities Involving Digital Assets. The purpose of the Joint Statement was “to remind persons engaged in activities involving digital assets of their anti-money laundering and … Continue Reading
On Oct. 16, 2019, Bermuda Premier the Hon. E. David Burt JP, MP announced that Bermuda has committed to accept, for payment of government taxes, fees, and services, 1:1 U.S.-dollar-backed digital currencies of entities licensed by the Bermuda Monetary Authority (BMA) under the 2018 Digital Asset Business Act (DABA), becoming the first nation to do … Continue Reading
On Oct. 9, 2019, the Internal Revenue Service (IRS) released revenue ruling (Rev. Rul. 2019-24) and a Frequently Asked Questions (FAQs) document, which provide additional guidance on the tax treatment and reporting obligations for transactions involving virtual currency (also known as cryptocurrency). This guidance supplements the original guidance that was issued in 2014 in the … Continue Reading
On Sept. 26, 2019, the Securities and Exchange Commission (SEC) announced it had adopted a new Rule 6c-11 under the Investment Company Act of 1940 (the “Investment Company Act” or the “Act”). Rule 6c-11 will permit exchange-traded funds (ETFs) that satisfy certain conditions to operate without the expense and delay of obtaining an exemptive order. The new … Continue Reading
On Aug. 15, 2019, the staff of the Division of Investment Management at the U.S. Securities and Exchange Commission (the “Staff”) issued a significant no-action letter. The letter clarifies the treatment of certain assets held by an entity seeking to rely upon Section 3(c)(5)(C) to be exempt from registration as an investment company under the Investment … Continue Reading
Rocky Mountain States Make Headway in Blockchain-Related Legislation With Wyoming having become the first state to define “utility tokens” as a new asset class (see article in Blockchain & Cryptocurrency’s Winter 2019 Issue), Montana and Colorado are following close behind with their own cryptocurrency legislation. Both states have blockchain-related bills going into effect in July and August … Continue Reading
On July 22, 2019, the federal bank regulatory agencies and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (collectively, the “Agencies”), issued a Joint Statement on Risk-Focused Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Supervision. The Joint Statement emphasizes their risk-focused approach to examinations of banks’ BSA/AML compliance programs and is the third statement from … Continue Reading
The SEC’s Division of Trading and Markets and the Office of the General Counsel of FINRA (Financial Industry Regulatory Authority) published on July 8, 2019, a joint staff statement (Custody Release) on broker-dealer custody of digital assets. The statement has been eagerly awaited by market participants, including broker-dealers, given significant uncertainty in the application of … Continue Reading
In connection with the U.S. financial crisis 10 years ago, legislation was adopted to enhance the safety and soundness of the commercial banking system in the United States. Amendments to the Bank Holding Company Act of 1956 required five federal financial agencies to adopt joint regulations to (i) limit the authority of commercial banking institutions to … Continue Reading
In July 2019, the SEC qualified the first token offerings under Regulation A+, approving blockchain startup Blockstack’s bitcoin-like digital tokens on July 10, and live video streaming platform YouNow’s offering of its “Props” tokens on July 11. These decisions will likely serve as new fundraising templates for many blockchain businesses. Blockstack Blockstack describes its services … Continue Reading
A bill to amend the Act on Settlement of Funds and the Financial Instruments and Exchange Act (FIEA) has passed both the upper and lower houses of Japan’s National Diet and was enacted on May 31, 2019. The amendments enhance the regulations on ICOs (Initial Coin Offerings) by applying the securities regulations under the FIEA … Continue Reading
In 2018 the Financial Industry Regulatory Authority (FINRA) undertook efforts to have member firms contact FINRA before engaging in activities involving digital assets by issuing Regulatory Notice 18-20. That approach led to many discussions between FINRA staff and member firms, and FINRA found that process useful to help it become aware of developing practices and … Continue Reading
The use of blockchain technology and the issuance of cryptocurrencies have grown considerably in recent years, inviting heightened scrutiny and regulation. While federal securities, tax, and other financial services regulatory agencies, such as the SEC, the IRS, state securities commissioners and others, have begun applying their rules and regulations to cryptocurrency businesses, the cryptocurrency industry … Continue Reading
On May 23, 2019, Florida Gov. Ron DeSantis signed SB 1024 (Florida Blockchain Bill) into law to establish the Florida Blockchain Task Force (Blockchain Task Force) within the Florida Department of Financial Services. The Blockchain Task Force will study if and how Florida’s state, county, and municipal governments can benefit from a transition to blockchain-based … Continue Reading
On May 9, 2019, the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (FinCEN) issued “interpretive guidance” addressing how FinCEN’s money services business (MSB) regulations apply to a variety of business models that use convertible virtual currency (CVC) (2019 FinCEN Guidance). This is the first significant guidance FinCEN has issued regarding the … Continue Reading
On May 3, 2019, the Securities and Exchange Commission (SEC) proposed amendments to the financial disclosure requirements in Rule 3-05 (Acquired Company Financial Information), Rule 3-14 (Real Estate Operations), and Article 11 (Pro Forma Financial Information) of Regulation S-X for financial statements of businesses acquired or to be acquired and for business dispositions. The SEC … Continue Reading
A bill to amend the Japanese laws regulating cryptocurrency exchange businesses or financial instruments transactions, including the Act on Settlement of Funds (Settlement Act) and the Financial Instruments and Exchange Act (FIEA), was submitted to the Diet on March 15, 2019. The bill proposes to call cryptocurrencies “Crypto Assets” (CA) rather than “Virtual Currencies” (VC) … Continue Reading
On March 21, 2019, in Van Dyke v. Jesse White, the Illinois Supreme Court issued a long-awaited opinion relating to Illinois Securities Department authority to regulate annuities under the Illinois Securities Law of 1953 (Act). By way of background, in 2011, the Illinois Securities Department audited Richard Lee Van Dyke following complaints from the adult … Continue Reading
