On March 17, 2022, FINRA issued Regulatory Notice 22-10 clarifying the scope of potential liability for CCOs related to supervision lapses. Specifically, unless a CCO is actually designated, directly or indirectly, with supervisory responsibilities, within the meaning of the relevant rule, supervision failures or deficiencies will not result in a FINRA enforcement action against a CCO.
On 09 March 2022, the US Securities and Exchange Commission (SEC) proposed amendments to its rules on disclosures regarding cybersecurity risk management, strategy, governance, and incident reporting by public companies. These rules are intended to enhance and standardize cybersecurity disclosures, and, if adopted in their current form, would require public companies to disclose cybersecurity-related policies, procedures and all material cybersecurity incidents.
After months of individual Commissioners and the Chair promising to do so, on December 15, 2021, the US Securities and Exchange Commission (SEC) issued proposed amendments to Rule 10b5-1 of the Securities Exchange Act of 1934, as well as proposing a number of additional disclosure requirements.
In yet another step forward on the SEC’s path toward a comprehensive ESG disclosure framework, on September 22, 2021, the Staff of the Division of Corporation Finance issued a Sample Letter to Companies on Climate Change Disclosure, relying on the Commission’s 2010 Climate Change Guidance.
As predicted in our Connect on Tech discussion in March, the U.S. Securities and Exchange Commission (“SEC”) is ramping up its examination and enforcement focus on cybersecurity at financial institutions, including scrutiny on actual implementation and deployment of published procedures in response to discovery of cyber breach incidents. Furthermore, the SEC appears to signal its expectation that multi-factor authentication (“MFA”) for email accounts containing sensitive client and customer information should be in place.
Continuing the practice of issuing Risk Alerts summarizing examination findings, which has only increased under the leadership of the now departing Division of Examinations (EXAMS) Director Pete Driscoll, on 21 July 2021, EXAMS issued such an Alert on fixed income principal and cross trades by investment advisers, a topic that the SEC Staff has been scrutinizing for some time.