June 20, 2019 •

SEC FINRA Pay-to-Play Rule Upheld by Federal Court

On June 18, a federal appellate court affirmed the legality of a Securities and Exchange Commission (SEC) pay-to-play rule. In New York Republican State Committee v. SEC, the U.S. Court of Appeals for the District of Columbia Circuit found the […]

On June 18, a federal appellate court affirmed the legality of a Securities and Exchange Commission (SEC) pay-to-play rule.

In New York Republican State Committee v. SEC, the U.S. Court of Appeals for the District of Columbia Circuit found the SEC’s Financial Industry Regulatory Authority (FINRA) Rule 2030 constitutional.

The rule prohibits a placement agent from accepting compensation for soliciting government business from certain candidates and elected officials within two years of having contributed to such an official’s electoral campaign or to the transition or inaugural expenses of a successful candidate.

The New York Republican State Committee and the Tennessee Republican Party had argued the SEC did not have authority to enact the rule, the order adopting the rule was arbitrary and capricious because there was insufficient evidence it was needed, and the rule violated the First Amendment of the Constitution of the United States.

While the court found the plaintiffs had standing, it ruled against all their arguments and upheld the rule.

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November 8, 2017 •

FINRA CAB Pay-to-Play Rules Effective December 6

On December 6, capital acquisition brokers (CAB) will become covered by the same pay-to-play rules the Financial Industry Regulatory Authority (FINRA) imposes upon broker-dealers, placement agents, and covered associates. Earlier this year, on August 20, FINRA implemented Rule 2030, a […]

On December 6, capital acquisition brokers (CAB) will become covered by the same pay-to-play rules the Financial Industry Regulatory Authority (FINRA) imposes upon broker-dealers, placement agents, and covered associates.

Earlier this year, on August 20, FINRA implemented Rule 2030, a new pay-to-play rule for broker-dealers, placement agents, and covered associates acting on behalf of certain regulated investment advisors or soliciting a government entity to invest in certain pooled investment vehicles. FINRA Rule 4580, which took effect the same day, mandates certain record-keeping requirements concerning any related contributions.

Starting in December, a firm meeting the statutory definition of a CAB and electing to be governed by the FINRA rule set would be subject to FINRA’s new pay-to-play rules. Specifically, FINRA’s CAB Rule 203 (Engaging in Distribution and Solicitation Activities with Government Entities) and CAB Rule 458 (Books and Records Requirements for Government Distribution and Solicitation Activities) require CABs be subject to FINRA’s pay-to-play Rules 2030 and 4580.

The new rules are meant to deter CABs from engaging in pay-to-play practices, according to FINRA Regulatory Notice 17-37.

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August 28, 2017 •

FINRA Proposes Pay-to-Play Rules for Capital Acquisition Brokers

The Financial Industry Regulatory Authority (FINRA) has filed a proposed rule change with the Securities and Exchange Commission (SEC) to expand its brand-new pay-to-play rules to cover capital acquisition brokers (CAB). FINRA Rule 2030, which took effect August 20, restricts […]

The Financial Industry Regulatory Authority (FINRA) has filed a proposed rule change with the Securities and Exchange Commission (SEC) to expand its brand-new pay-to-play rules to cover capital acquisition brokers (CAB).

FINRA Rule 2030, which took effect August 20, restricts contributions made to an official of a government entity being provided investment advisory services or being engaged to provide investment advisory services by certain parties. The rule applies to broker-dealers, placement agents, and covered associates acting on behalf of certain regulated investment advisors or soliciting a government entity to invest in certain pooled investment vehicles. FINRA Rule 4580, which took effect the same day, mandates certain record-keeping requirements concerning related contributions.

A firm meeting the statutory definition of a CAB and electing to be governed by the FINRA rule set would be subject to FINRA’s new pay-to-play rules under the proposal. Specifically, FINRA proposes the addition of rules providing all CABs be subject to FINRA Rules 2030 and 4580. If approved, the effective date will be no later than 30 days after FINRA’s announcement of the SEC’s approval.

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August 25, 2017 •

NYCU Video Digest – August 25, 2017

Becky is back to deliver all the government and ethics news you can use in this weeks video digest!  

Becky is back to deliver all the government and ethics news you can use in this weeks video digest!

 

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August 18, 2017 •

New FINRA Pay-to-Play Rules Effective August 20

On August 20, new pay-to-play regulations of the Financial Industry Regulatory Authority (FINRA) take effect. FINRA Rule 2030 restricts contributions made to an official of a government entity being provided investment advisory services or being engaged to provide investment advisory […]

On August 20, new pay-to-play regulations of the Financial Industry Regulatory Authority (FINRA) take effect. FINRA Rule 2030 restricts contributions made to an official of a government entity being provided investment advisory services or being engaged to provide investment advisory services by certain parties.

The rule applies to broker-dealers, placement agents, and covered associates acting on behalf of certain regulated investment advisors or soliciting a government entity to invest in certain pooled investment vehicles.

The restrictions also prohibit soliciting a political action committee to make contributions or doing anything indirectly that, if done directly, would result in a violation of the rules. Another rule effective on the same date is FINRA Rule 4580, which mandates certain record-keeping requirements concerning related contributions.

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