New rankings show that Delaware is a better place to hide money than Switzerland. While this may come as a surprise to most Americans, financial sector analyst Heather Lowe says that it is not a surprise to the world’s criminals. Question: would that be in, uh, Dollars?? Spin, spin, spin… Watch the video

How the Government is taxing small businesses

Recently sticker shock had eyes popping out of their head all across America as Firm owners received their SIPC bill. For nearly 14 years the SIPC insurance cost of a brokerage firm was $150.00 flat fee paid annually. That changed dramatically for firms in the past few weeks as bills totaling 5, 10, even $50,000 began arriving at firms doorsteps to help pay for the huge cost associated with bailing out the Madoff’s and Lehman’s of the world. Instead of a flat fee, firms are now being taxed (or punished depending on your view!) a whopping one quarter of 1 percent of the firms total revenue (not profits, as one might expect, but revenues)… (more…)

As a reader of this paper, you are clearly an experienced and competent member of a broker-dealer management team. Furthermore, it is likely you are reading this column because you are acutely aware that you exist in the most hostile regulatory environment created thus far. (more…)

Regulatory Notice 08-09

FINRA Revises Portfolio Margining Risk Disclosure Statement and Written Acknowledgment for Customers Using Portfolio Margin Accounts;

Effective Date: 03/14/08

Executive Summary
FINRA has revised the sample portfolio margining risk disclosure and acknowledgment statements that member firms must provide to customers who have been approved for portfolio margin. This replaces the March 2007 sample risk disclosure and acknowledgment statements.1 See Attachment A for the sample disclosure and acknowledgment statements. (more…)

In 2005, the SEC formally adopted Rule 202, commonly known as the Merrill Lynch Rule and, suddenly, the big firms had “advisors” rather than “brokers,” placing them conceptually on par with the offerings at the indy firms. Problem was, the title change along with the Merrill Lynch Rule exemption didn’t automatically qualify brokers to give investment advice. (more…)

Regulatory Notice 07-51
Amendments to NASD IM-9216 to include certain NYSE Rules under the Minor Rule Violation Plan; Effective Date: 09,24, 2007 (more…)

Regulatory Notice 07-43
FINRA Reminds Firms of Their Obligations Relating to Senior Investors and Highlights Industry Practices to Serve these Customers

Executive Summary
One of FINRA’s priorities is the protection of senior investors, as well as Baby Boomers who are at or approaching retirement.1 FINRA’s efforts in this area include investor education, member education and outreach, examinations and enforcement.

The purpose of this Notice is to urge firms to review and, where warranted, enhance their policies and procedures for complying with FINRA sales practice rules, as well as other applicable laws, regulations and ethical principles, in light of the special issues that are common to many senior investors. The Notice also highlights, for the consideration of FINRA’s member firms, a number of practices that some firms have adopted to better serve these customers.

1 For ease of reference, this Notice refers to both categories as seniors unless the context requires amore specific reference.

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As broker-dealers continue to vie for top-grossing talent among registered representatives, the SEC and NASD have both signaled a focus on certain ramifications for firms that hire on new reps. Consistent with ever-growing consumer concerns over the security and privacy of personal data given to retailers, the SEC appears to be targeting securities firms’ use of client information, specifically when new reps bring over customers from prior firms. (more…)

Special Considerations When Supervising Recommendations of Newly Associated Registered Representatives to Replace Mutual Funds and Variable ProductsExecutive Summary
Registered representatives with an established customer base may, from time to time, change their association from one firm to another and may wish to bring with them customer assets, including mutual funds and variable products. (more…)

Reprinted with permission of the NASD

The NASD has developed this information to make registered representatives (RRs) aware of the compliance requirements and potential liabilities when using the Internet and electronic communications. This information along with all rules and regulations cited are available on the NASD website.

This letter addresses some general compliance requirements that apply to electronic communications. It also discusses specific considerations relating to the use of e-mail, group e-mail, and websites including chat rooms and instant messaging. We have based the information on published rules, interpretations and notices. (more…)