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Jacko Law Group Blog

The Securities and Exchange Commission Awards Whistleblower

The SEC Whistleblower Program (the “Program”), which became a final rule on August 12, 2011, provides incentives and protection to whistleblowers who provide the SEC with original information about violations of the federal securities laws. Under the Program, an “eligible whistleblower” is entitled to an award of between 10% and 30% of the monetary sanctions collected in actions brought by the SEC or other regulatory and law enforcement authorities.

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CFTC Publishes FAQs on Compliance Obligations for CPOs and CTAs

This week the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) published a set of Frequently Asked Questions (FAQs) addressing compliance obligations for Commodity Pool Operators (CPOs) and Commodity Trading Advisors (CTAs). The FAQs address a number of concerns raised by market participants since CFTC’s adoption of new regulations pursuant to Dodd-Frank. The issues addressed in the FAQs include clarification on what entities must register under the new rules, specific compliance dates, and the process for transitioning from the eliminated exemption under Rule 4.13(a)(4). Of note:

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ERISA Rule 404a-5 Disclosure Deadline on the Horizon

ERISA Rule 404a-5 was enacted in order to provide greater transparency to investors in 401(k) type pension plans. The rule was adopted two years ago, but the August 30, 2012 deadline for plan administrators to issue the required disclosures is just around the corner. As reported earlier this year, the August 30th deadline gives plan sponsors 60 days from the July 1, 2012 deadline for service providers to provide specific disclosures related to their costs and expenses to plan sponsors.

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BD Corner: New Suitability Rule Takes Effect

FINRA recently published Regulatory Notice 12-25 to provide broker-dealers with additional guidance on the SRO’s new suitability rule, which took effect on July 9th. The new suitability standards under Rule 2111 were approved by the SEC in November, 2010. They were initially scheduled to take effect on October 7, 2011, but the deadline was extended in response to requests from the industry for more implementation time. The recent release responds to requests from FINRA member firms for additional direction on issues they identified during the implementation process. The release also provides useful information concerning the implementation of a risk-based approach to documentation of suitability compliance and the scope of appropriate information gathering from clients.

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