Insurance & Financial Services

This advisory discusses the SEC’s approval of an NYSE waiver extension that gives NYSE-listed companies through September 30, 2020 to complete certain capital raising transactions.

FINRA recently issued Regulatory Notice 20-17 (“Reg. Notice 20-17”) addressing changes to FINRA Rule 4530 due to the impending implementation of Regulation Best Interest (“Reg. BI”). Rule 4530 requires member firms to report, among other things, statistical and summary information regarding written customer complaints, as well as specified criminal actions, civil complaints and arbitration claims.

On May 26, 2020, Mayor de Blasio signed into effect N.Y.C. Council Int. No. 1932-A (2020). The law amends NYC administrative code by rendering unenforceable provisions in commercial leases providing for personal guaranties by individuals where the tenant’s business was negatively impacted by COVID-19.

Leveraged loans continue to be a topic of interest in the current environment, particularly when they are pooled and securitized as collateralized loan obligations. A recent decision sheds light on whether and when leveraged loans and similar instruments may be classified as securities and, therefore, be subject to securities laws.

FINRA, through its most recent Regulatory Notice 20-16 , shares certain common practices they have seen taken by member firms to enhance supervision in the remote work environment due to the COVID-19 pandemic.

Recent Executive Orders by New York Governor Cuomo and Administrative Orders by the New York State courts effectively have stayed the enforcement of residential and commercial evictions and foreclosures in New York through June 20, 2020, and barred the commencement of any such new proceedings until further order of the courts.

The American Securities Association (“ASA”), a financial industry trade association representing regional and small financial services companies, has sued the Securities and Exchange Commission (“SEC”) to prevent the SEC from using the Consolidated Audit Trail (the “CAT”) initiative to gather personal data of retail investors.

In what will likely be the first of many, the SEC brought an action against a company for false and misleading press releases related to the COVID-19 pandemic.

On April 23, 2020, the CFTC announced a targeted no-action relief to certain market participants from compliance with net capital treatment of covered loans received under the Paycheck Protection Program (PPP) pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Due to the economic impact of COVID-19, especially on smaller broker-dealers, FINRA will allow small firms more time to pay their Annual Assessment (comprised of the Gross Income Assessment and the Personal Assessment).

Because they are working from home and are not able to meet clients face-to-face due to COVID-19 restrictions, many registered representatives are communicating with clients via live audio or video conference meetings.

In its online forum regarding COVID-19/Coronavirus, FINRA has issued guidance related to PPP loans.

On the heels of codifying 940 CMR 35.00, the “Unfair and Deceptive Debt Collection Practices During the State of Emergency Caused by COVID-19” (the “Emergency Regulations”), Attorney General Maura Healey issued guidance on April 3, 2020 “to provide clarity with regard to frequently asked questions concerning the Emergency Regulations[.]”

The Federal Reserve (Fed) announced that it is modifying this year's stress test to reflect how banks have performed during the COVID-19 pandemic.

On April 3, 2020, FinCEN issued its second notice related to the COVID-19 pandemic (Notice).