By Andrew Cross, Anna Smith-Sandy

On April 6, 2020, the Commodity Futures Trading Commission (“CFTC”) Office of Customer Education and Outreach (“OCEO”) published an additional customer advisory (“Advisory”) cautioning the public regarding potential fee scams. OCEO noted that many of these schemes are now targeting individuals that may be financially impacted by the Coronavirus pandemic. OCEO previously published a Customer Advisory on March 31, 2020 regarding potential fraudulent schemes posing to take advantage of market volatility related to the pandemic. (See our blog post on this advisory here).

Authored by Stephen A. Keen & Michael S. Didiuk

In our previous post, we reviewed how the financial markets’ reaction to the COVID-19 pandemic requires mutual funds to review, and possibly reclassify, the liquidity of their investments. As liquidity and valuation are often two sides of the same coin, factors that may lead to reclassifying a security’s liquidity may also raise questions concerning how to value the security for purposes of calculating a mutual fund’s net asset value (“NAV”). This post discusses when this may be the case.

Authored by Andrew Cross

Three federal bank regulatory agencies – the FRB, FDIC, and OCC – today announced two COVID-19 related actions to support the U.S. economy and allow banking organizations to continue to lending to households and businesses:

• Allow early adoption of the “standardized approach for measuring counterparty credit risk,” or “SA-CCR,” which is

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Authored by Stephen A. Keen & Michael S. Didiuk

During a recent webinar, Steve explained that the market and trading conditions caused by the COVID-19 pandemic might be “reasonably expected to materially affect one or more of [a mutual fund’s] investments’ classifications” for purposes of the fund’s liquidity risk management program (its “LRM Program”). In this circumstance, Rule 22e-4 under the Investment Company Act of 1940 requires more frequent review of these classifications. This post describes how a rough market may require a mutual fund (other than a money market fund or in-kind exchange traded fund) to reclassify an investment’s liquidity classification.

Authored by Val Dahiya & Thomas Ahmadifar

The U.S. Securities and Exchange Commission (“SEC”) recently provided relief relating to the implementation of the Consolidated Audit Trail (“CAT”). First, on March 16, 2020, the SEC’s Division of Trading & Markets staff issued a No-Action Letter (“NAL”) to temporarily allow broker-dealer personnel who are working on CAT implementation to focus on critical operations. Second, on March 17, 2020, the SEC granted relief aimed at reducing CAT cybersecurity risks by exempting self-regulatory organizations (“SROs”) from collecting or retaining certain retail customer data. In addition, as a result of the market volatility caused by the COVID-19 pandemic, the SEC’s Division of Enforcement issued a reminder on the importance of maintaining market integrity.

Authored by Val Dahiya & Thomas Ahmadifar

In the midst of the COVID-19 pandemic, the financial markets have experienced significant volatility. During the course of this volatility, exchanges have halted trading multiple times after declines in trading trigged circuit breakers. In addition, trading floors are transitioning to electronic trading in efforts to prevent the transmission of COVID-19 on physical trading floors. With the recent turmoil, this post provides a high-level summary of the various types of circuit breakers and what can be expected.