Our Broker-Dealer Regulation & Compliance practice advises leading financial market participants in multiple jurisdictions on a range of cutting-edge issues related to securities regulation, new products or services, capital markets, compliance and enforcement. We have long-standing relationships with key regulatory bodies around the world, including the US Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), the UK Financial Conduct Authority and the UK Prudential Regulation Authority. Our global team offers practical regulatory advice to the financial services sector in innovative and often complex matters. We devise and implement sophisticated policies and supervisory procedures designed to achieve compliance with applicable laws and regulations.
Our practice is comprised of lawyers in the Americas, Europe and Asia who work as a team to provide thoughtful solutions to complex issues affecting broker-dealers and other financial services firms. We have proven experience in counseling clients on triggers for broker-dealer registration, and where needed, advising them through the registration and FINRA new member application process. We advise on federal and state securities laws and self-regulatory organization (“SRO”) compliance and examination issues, mergers and successions, internal audits, regulatory inspections, and enforcement actions. We count among our Mayer Brown colleagues, partners who have held senior positions at key regulatory bodies and have worked on several major rule-making initiatives in these areas.
We advise clients on:
- Cross-border brokerage and securities trading transactions, particularly Rule 15a-6 related issues
- Regulation Best Interest and suitability
- Soft dollar, client referral and networking arrangements
- MiFID requirements, research and related issues
- Broker-dealer financial responsibility, including Net Capital, Customer Protection, and margin
- Short selling regulation and Rule 105 of Regulation M compliance
- Selling group and other securities distribution agreements
- Prime brokerage arrangements
- Introducing and clearing relationships
- State and non-US “blue sky” laws
- FINRA advertising and filing requirements
- Regulation M guidance
Our lawyers are on faculty at leading universities, have leadership positions in legal trade groups, and work closely with industry participants and trade organizations on public policy matters. We work closely with broker-dealers to navigate various regulatory requirements stemming from legislative and regulatory developments, including those addressing fraud, anti-manipulation, credit ratings agency reform, the standards of care of broker-dealers and investment advisers, and enhancements to capital and financial controls over broker-dealers. Our advice to clients includes guidance on compliance and supervisory procedures in areas subject to heightened regulatory scrutiny.
Exemptions and Exceptions
We advise financial institutions (including banks, trust companies, credit unions and thrifts) about “status” questions—i.e., whether an institution’s activities trigger registration or other regulatory requirements (e.g., distinctions between brokers and finders or dealers and traders). If registration requirements are triggered, we assist clients in evaluating whether various exemptions or exceptions are available. For example, we advise non-US banks regarding the conditional exemptions from SEC broker-dealer registration under the Securities Exchange Act of 1934 Rule 15a-6. Similarly, we advise US banks regarding the so-called bank/broker-dealer “push-out” exceptions in the United States under Regulation R and related Exchange Act rules.
We are able to leverage our knowledge of the insurance industry and advise insurance owned broker-dealers on questions relating to status, referral payments and transactions in insurance products, which present complex brokerage issues. Mayer Brown has one of the leading global insurance industry practices.
Registration and Ongoing Compliance
For clients that are not exempt from broker-dealer regulation, we help prepare organizational documents and licensing materials. We provide advice with respect to trading procedures; reporting obligations; information barriers, compliance and supervisory policies; data privacy; business continuity programs; reviews of advertising materials; recordkeeping; and the use of websites and electronic delivery.
We prepare clients for interactions with regulators on issues ranging from customer complaints and administrative actions to regulatory inspections and examinations.
Our Fintech practice is a multi-disciplinary team of lawyers that leverages our experience across our global platform. Our clients are on the cutting-edge of financial products and services, and we offer practical and innovative solutions to address issues of first impression.
- Non-US banks and brokers regarding exceptions or exemptions from SEC broker-dealer registration (e.g., limited cross-border contacts under Exchange Act Rule 15a-6)
- Financial services firms and trade associations in drafting comment letters on rulemakings by the SEC, other US federal regulators, and FINRA
- Securities intermediaries with broker and dealer status questions (e.g., distinctions between brokers and finders or dealers and traders)
- US registered broker-dealers in responding to inquiries/comments from the SEC, other US federal regulators, and FINRA
- US banks regarding securities brokerage advice and dealing "push-out" requirements
- US registered broker-dealers in complying with rules and regulations of the SEC, FinCEN, other US federal regulators, FINRA, and other securities self-regulatory organizations
March 12 – 152023