Alston & Bird attorneys who handle regulatory matters and related securities enforcement matters for broker-dealer clients includes former AUSAs. Working together, they bring their many years of collective experience successfully representing clients before governmental agencies and self-regulatory organizations (SROs), as well as in civil litigation matters, to help clients respond to regulatory issues arising out of their securities activities.
We regularly advise broker-dealers on a variety of matters, including registration, disclosure and compliance. We help clients organize and register with the SEC, apply for SRO membership, create compliance manuals and other required policies and procedures, and otherwise assist them with all aspects of starting up and maintaining their business. We also provide advice on changes in control, suitability, market and trading rules, trade reporting, registration, net capital and margin rules, supervision rules, sales practice and advertising rules, new issue rules, anti-money laundering (AML) compliance, business continuity planning, cybersecurity and applicable SRO membership rules. We review and revise training programs and materials and conduct compliance audits.
Representative services include:
- Assisting in registering broker-dealers and their personnel with the SEC, exchanges and FINRA, obtaining regulatory approvals for changes in ownership and business operations, and complying with all applicable SEC and SRO rules.
- Drafting compliance manuals, expense sharing agreements, written supervisory procedures, codes of ethics and business continuity plans.
- Preparing for regulatory agency examinations regarding brokerage operations and responding to agency comment letters, inquiries and investigations.
- Providing regulatory advice to trading firms and others in connection with matters arising under Regulation NMS, including the Trade-Through Rule, Quote Rule, Limit Order Display Rule and Rules 605 and 606; Regulation SHO, including order marking, locates, threshold securities and close-outs; Regulation M, including restricted periods, subject securities and compliance with Rule 105; Rule 10b-10; Regulations S-P and S-AM; Rule 15c3-5 (market access); and large trader reporting.
- Providing regulatory advice to trading firms regarding compliance with SRO trading-related rules, including best execution requirements, market making, short selling, trading ahead and interpositioning, trade reporting, books and records, account opening and OATS reporting.
- Providing advice to domestic and foreign broker-dealers on the application of the U.S. securities laws to cross-border business, including to outsourcing arrangements, and Exchange Act Rule 15a-6.
- Providing regulatory advice on transactions (e.g., mergers and acquisitions) involving regulated entities.
- Providing advice to alternative trading systems and others regarding the application of, and regulatory issues arising under, Regulation ATS and assisting alternative trading systems with their required Forms ATS and ATS-R filings.
- Providing advice to options trading firms on SRO rule compliance, including participation in automated exchange auctions, exercise allocations and position limits.
- Providing advice on broker-dealer net capital, customer protection rules and margin requirements, and assisting clients with required regulatory notices of net capital withdrawals and deficiencies.
- Representing broker-dealer clients in connection with a wide range of regulatory inquiries and assisting clients in responding to requests for information from regulators (e.g., EBS requests). These matters have included:
- Short sale order marking and locate requirements, including compliance with short sale emergency orders.
- Trade reporting, including riskless principal trades.
- Maintenance of fair and orderly markets, gap trades and other rules applicable to specialists/designated market makers.
- Order Handling Rules (e.g., best execution, trading ahead of customer orders, interpositioning).
- Regulation M (Rules 101, 102 and 105).
- Books and records requirements.
- Potential violations of the securities registration provisions of the Securities Act of 1933.
- Potential violations of the anti-fraud provisions of the federal securities laws.
- Advising clients, including crowdfunding intermediaries, on broker-dealer status issues, including arrangements with so-called “finders,” compliance with Exchange Act Rule 3a4-1 and state broker registration requirements.
- Assisting clients in commenting on SEC and SRO rulemaking proposals, including the SEC’s Concept Release on Equity Market Structure, proposed rule amendments relating to dark pools and amendments to Regulation SHO.
- Conducting AML audits for clients and assisting them in developing AML compliance programs.
- Providing advice regarding mutual fund distribution and compensation arrangements, including Rule 12b-1 fees, service fees, soft dollars, revenue sharing agreements and commissions.
- Conducting compliance reviews (independent and otherwise) for trading firms, investment advisers and hedge funds in connection with those entities’ settlements of SEC enforcement actions and in connection with or in anticipation of regulatory examinations.
- Assisting clients in obtaining no-action and exemptive relief from the SEC and Commodity Futures Trading Commission (CFTC).