The experts at Duff & Phelps provide a calendar of key dates for the financial services industry in U.S.

Topic Update Date

SEC Approval of Amendments to FINRA New Issue and Anti-Spinning Rules

Unless an exemption applies, FINRA Rule 5130 prohibits securities industry insiders from purchasing new issues through any account in which they have a “beneficial interest”. FINRA Rule 5131 prohibits the allocation of new issues to accounts in which executive officers or directors of a public company or a “covered non-public company” have a beneficial interest. Among many substantive changes, FINRA has expanded rules to conform to the SEC’s Family Office Rule and removed the limitation with respect to immediate family members. FINRA exempted from Rule 5130 family investment vehicles beneficially owned by “family clients”, provided that, where such beneficial owners include key employees who are not family members, the person with sole investment authority is an “immediate family member”.

A detailed summary can be found on the FINRA website.

January 1, 2020

GIPS Standards

The 2020 GIPS Standards for Firms include Advertising Guidelines applicable to asset managers and asset owners. The new updates are intended to improve the accessibility and appeal of GIPS to alternative and pooled fund managers and introduce the following:

  • New report formats for traditional GIPS-compliant presentations, pooled fund and asset owners reports
  • Options for limited distribution and broadly distributed funds to present pooled fund report or composite reports in certain situations
  • Options for alternative managers to satisfy the external valuation requirement associated with private market investments.

Additionally, GIPS compliant firms gain flexibility through new options to report the internal rate of return rather than time weighted return (TWR) in certain circumstances, and a return to the acceptable use of carve-outs.

January 1, 2020.

California Consumer Privacy Act (CCPA)

With the New Year, businesses that meet the threshold for CCPA compliance must protect the privacy of California residents: including the right to access, right to know, right to opt-out and right to deletion. A detailed summary to establish if CCPA applies can be found in an insight published by Kroll.

January 1, 2020.

New York’s SHIELD Act.

The Stop Hacks and Improve Electronic Data Security Act (“SHIELD Act”), broadens the scope of New York’s data breach notification law, expanding the privacy rights of New York residents. The notification requirements now apply to any person and business that handles New York residents’ information –regardless of whether that person or business conducts in New York.

The SHIELD Act also broadens the scope of incidents that require notification, by expanding the definition of “private information” and requiring notification for instances of “unauthorized access.” Finally, it mandates that companies within its scope establish certain safeguards, discussed in detail in this piece.

The State of New York is now considering enacting a new privacy law named the New York Privacy Act (NYPA). If enacted, this could potentially impose stricter requirements than even the California Consumer Privacy Act.

March 21, 2020.

NFA guidance on the annual affirmation requirement for entities operating under CPO or CTA registration exemption 

The CFTC requires any person claiming an exemption from CPO registration under CFTC Regulation to annually affirm the applicable notice of exemption. This must be done within 60 days of the calendar year end, which is February 29, 2020, for this affirmation cycle. Failure to affirm an active exemption from CPO or CTA registration will result in the exemption being withdrawn on March 1, 2020. For registered CPOs or CTAs, withdrawal of the exemption results in the entity being subject to certain requirements regardless of whether the entity otherwise remains eligible for the exemption. For non-registrants, the withdrawal of the exemption may subject the person or entity to enforcement action by the CFTC. A detailed summary can be found at the NFA’s website.

February 29, 2020.

SEC’s BI (Best Interest) rule. 

The SEC’s adoption of Regulation Best Interest (Reg BI) establishes a “best interest” standard of conduct for broker-dealers and associated persons when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of types of accounts.

As part of the change, the SEC has also adopted new rules and forms to require broker-dealers and investment advisers to provide a brief relationship summary, Form CRS, to retail investors. In addition, the SEC has published interpretations, concerning investment advisers’ standard of conduct under the Investment Advisers Act, and the “solely incidental” prong of the Act’s broker-dealer exclusion. Firms must comply with Reg BI and Form CRS by June 30, 2020. A detailed summary is available from the SEC.

June 30, 2020.

NFA Swaps proficiency requirements

NFA has updated its rules to impose “swaps proficiency requirements” on associated persons of NFA members that engage in swap-related activities. The new requirements are required as of January 31, 2021.

Individuals currently approved as a swap associated person (“AP”) and intend to continue acting in this capacity after the compliance date from January 31, 2021 must satisfy the applicable NFA Swaps Proficiency Requirements. There will not be a “grandfather” clause for individuals who have existing exemptions, and all individuals wanting to act as swap associated persons for registered CPOs or CTAs are required to satisfy the new swaps proficiency requirements. The existing Series 3 will remain a separate requirement, and is not affected. The NFA, again, provides a detailed summary.

January 31, 2021.

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