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Articles by Lloyd S. Harmetz
Questionable Regulation S Sales of Structured Products Result in FINRA Fine
Firms that offer unregistered securities under Regulation S must conduct appropriate procedures to determine whether potential customers are eligible to purchase these securities. Otherwise, they may subject themselves to regulatory scrutiny not only for potential 1933 Act violations, but also for inadequate supervision of sales activity in violation of FINRA Rule 3110.
FINRA Enforcement Signals Higher Bar for Complex Product Supervision Under Reg BI
Recent FINRA enforcement activity underscores that investment recommendations involving alternative and/or complex financial instruments require heightened principal-level scrutiny under Regulation Best Interest. Firms should continuously review and update supervisory policies and procedures, as well as monitor principal compliance with established protocols, to detect and address investment recommendations that may run afoul of Reg BI’s Care Obligation.
SEC Adopts Rules and Exemptions Relating to Section 16 Reporting
In January 2026, we discussed Congress's adoption of the "Holding Foreign Insiders Accountable Act" (the "Act"), and its impact on foreign private issuers. Directors and officers of these companies will shortly be required to file reports as to their holdings of their companies’ equity securities, and their trading in those securities. Our article may be found here. The Act required the SEC to adopt new regulations to effect the Act's provisions, which the SEC did on February 27, 2026.
SEC Adopts Rules Relating to Section 16 Reporting
In January 2026, we discussed Congress's adoption of the "Holding Foreign Insiders Accountable Act" (the "Act"), and its impact on foreign private issuers. Directors and officers of these companies will shortly be required to file reports as to their holdings of their companies’ equity securities, and their trading in those securities. Our article may be found here. The Act required the SEC to adopt new regulations to effect the Act's provisions, which the SEC did on February 27, 2026.
Nasdaq Proposes New "Fast Entry" Rule for the Nasdaq-100 Index
Many market watchers are looking forward this year to several potential large new IPOs by major technology companies, such as Anthropic, OpenAI and SpaceX. In February 2026, Nasdaq, the sponsor of the Nasdaq-100 Index (the "NDX"),1 proposed a new "fast entry" rule that could enable the early inclusion of these types of companies into the index.
FINRA Proposes Updated Protection Rules for Accountholders
In January 2026, FINRA proposed additional rules that are intended to address fraud and financial exploitation, particularly with respect to elderly customers. FINRA's Regulatory Notice 26-02, which describes the proposal, may be accessed here.
U.S. Legislation Enacted to Extend Insider Reporting to Foreign Private Issuers
On December 18, 2025, U.S. President Trump signed into law the "National Defense Authorization Act for Fiscal Year 2026" (the "NDAA"). Our recent client alert, available here, discusses the implications of this law as to insiders of "foreign private issuers" ("FPIs").
Proposed U.S. Legislation to Extend Insider Reporting to Foreign Private Issuers
In December 2025, the U.S. House of Representatives issued the text of its proposed "National Defense Authorization Act for Fiscal Year 2026" (the "NDAA").1 Notwithstanding the title of the bill, as often occurs, the bill contains a wide variety of proposals that are not directly related to the subject of national defense.
FINRA Issues Investor Insight on Non-Traditional Indices
In August 2025, FINRA published an article addressed to investors relating to "non-traditional" indices. The article may be found on FINRA's website, here. FINRA's article is designed to focus investors on key considerations and risks that apply to the structured products, investment funds and other instruments that track these indices. Of course, the term "non-traditional" is not a precise legal term, and can mean different things to different market participants1.
FINRA issues investor insight on non-traditional indices
In August 2025, FINRA published an article addressed to investors relating to "non-traditional" indices. The article may be found on FINRA's website, here. FINRA's article is designed to focus investors on key considerations and risks that apply to the structured products, investment funds and other instruments that track these indices. Of course, the term "non-traditional" is not a precise legal term, and can mean different things to different market participants1.
NYSE Proposes Rule Change to Limit the Use of Reverse Stock Splits to Regain Price Criteria Compliance
On September 30, 2024, the New York Stock Exchange (NYSE) filed a proposed rule change with the Securities and Exchange Commission (SEC) that would amend Section 802.01C's definition of Price Criteria in the NYSE Listed Company Manual (Manual)1. The proposal would also limit the ability of listed companies to utilize reverse stock splits in order to regain compliance with certain minimum trading price criteria set forth in the Manual.
SEC Adopts New Rule 3c-7, Setting Inflation-Adjusted Dollar Threshold for Qualifying Venture Capital Funds
The U.S. Securities and Exchange Commission (“SEC”) announced on August 21, 2024 the adoption of new Rule 3c-7, updating the dollar threshold used to distinguish investment companies, regulated by the Investment Company Act of 1940 (the “Act”), from "qualifying venture capital funds." Qualifying venture capital funds are exempt from the registration requirements otherwise applicable to investment companies under the Act.1 With this new Rule 3c-7, the SEC has increased the dollar threshold for...
Ashurst continues to grow New York office and US securities law team with hire of Evan Hillman
Global law firm Ashurst announces the appointment of Evan Hillman as counsel in its Global Structured Products practice, based in New York, as the firm continues to invest in growing its New York team and US securities law capabilities. Evan's practice focuses on securities regulation, corporate law and governance, mergers and acquisitions, and risk management.
FINRA Updates Form For Private Placement Filings
United States: FINRA Updates Form For Private Placement Filings 17 March 2021 by Lloyd S. Harmetz , Heath D. Linsky and Hillel Cohn Morrison & Foerster LLP Your LinkedIn Connections with the authors To print this article, all you need is to be registered or login on Mondaq.com. In its March 2021 Regulatory Notice 21-10, FINRA announced that it has updated the form that FINRA members use to file offering documents and related information regarding their participation in private placements.
FINRA Updates Form For Private Placement Filings | JD Supra
In its March 2021 Regulatory Notice 21-10, FINRA announced that it has updated the form that FINRA members use to file offering documents and related information regarding their participation in private placements. See FINRA Rule 5122[1] and Rule 5123.[2] The new form will be accessible in the FINRA Gateway as of May 22, 2021. The updated form will be used in connection with new filings and amendments to prior filings.
FINRA Issues Reminder Relating To Mark-Up Disclosure Requirements For Structured Notes
United States: FINRA Issues Reminder Relating To Mark-Up Disclosure Requirements For Structured Notes 19 February 2021 by Lloyd S. Harmetz and Hillel Cohn Morrison & Foerster LLP Your LinkedIn Connections with the authors To print this article, all you need is to be registered or login on Mondaq.com. The Financial Regulatory Authority (FINRA) recently issued a detailed report on compliance issues noted in its examination program (the "Report"). The Report may be found here.
FINRA Issues Reminder Relating To Mark-Up Disclosure Requirements For Structured Notes | JD Supra
The Financial Regulatory Authority (FINRA) recently issued a detailed report on compliance issues noted in its examination program. In this alert, we discuss FINRA’s observations relating to Rule 2232, which requires broker-dealers to provide additional transaction-related information to retail customers for certain types of trades in debt securities, and the market for structured notes... Please see full Alert below for more information.
FINRA Issues Comprehensive Guidance On Compliance And Risk Monitoring
United States: FINRA Issues Comprehensive Guidance On Compliance And Risk Monitoring 15 February 2021 by Hillel Cohn and Lloyd Harmetz Morrison & Foerster LLP Your LinkedIn Connections with the authors To print this article, all you need is to be registered or login on Mondaq.com.
FINRA Issues Comprehensive Guidance on Compliance and Risk Monitoring
The Financial Regulatory Authority (“FINRA”) recently issued a comprehensive report on compliance issues noted in its examination program (the “Report”). The Report is intended to assist broker-dealers in identifying and addressing potential weaknesses in their compliance procedures, and discusses 19 different topics.
FINRA Issues Comprehensive Guidance On Compliance And Risk Monitoring | JD Supra
The Financial Regulatory Authority (“FINRA”) recently issued a comprehensive report on compliance issues noted in its examination program (the “Report”).[1] The Report is intended to assist broker-dealers in identifying and addressing potential weaknesses in their compliance procedures, and discusses 19 different topics.
SEC Continues Enforcement Actions Relating To Complex Exchange-Traded Products
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SEC Continues Enforcement Actions Relating to Complex Exchange-Traded Products - Structured Thoughts | JD Supra
On November 13, 2020, the SEC announced that it had settled actions against several investment advisory firms and firms dually-registered as broker-dealers and investment advisers. These actions relate to unsuitable sales of complex exchange-traded products (ETPs). All of the actions related to sales of volatility-linked ETPs that tracked expectations of short-term market volatility, measured through derivatives based on the CBOE Volatility Index...
FINRA Proposes Additional Filing Requirements For Private Placements | JD Supra
In October 2020, the Financial Industry Regulatory Authority (FINRA) proposed a rule amendment that would expand its filing requirements relating to private placements. Under the proposal, FINRA would amend its Rules 5122 (Private Placements of Securities Issued by Members) and 5123 (Private Placements of Securities) to require members to file “retail communications” concerning private placement offerings that are subject to the filing requirements under those rules.
SEC Issues Joint Statement Relating To Complex Financial Products
Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice): Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below. Mondaq has a "free to view" business model.
Structured Thoughts - News For The Financial Services Community - October 2020 | JD Supra
On October 28, 2020, the U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton, together with the directors of three SEC divisions, issued a joint statement relating to complex financial products. The statement relates to a fairly broad group of products, but addresses in particular a number of sophisticated leveraged and inverse structured products, including ETFs and exchang- traded notes (ETNs)... Please see full Newsletter below for more information.
SEC Clarifies SPAC Eligibility For Short-Form Registration | JD Supra
In September 2020, the U.S. Securities and Exchange Commission (SEC) attempted to clarify the extent to which a special purpose acquisition company (SPAC) can use the short-form Form S-3 to register securities after completing the acquisition of one or more private operating companies. The SEC’s new Securities Act Forms Compliance and Disclosure Interpretation (C&DI), Question 115.18, may be found here.
FINRA Provides Guidance On Retail Communications In Private Placements | JD Supra
Introduction and Summary of Findings In July 2020, FINRA issued Regulatory Notice 20-21, which is designed to provide guidance to broker-dealers in connection with their creation and use of retail communications relating to private placements. The complete regulatory notice may be found here. The notice largely reflects FINRA’s recent experience in reviewing the documents filed under its rules.
Structured Thoughts: News for the Financial Services Community, Volume 10, Issue 6 | JD Supra
Updated: May 25, 2018: JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
Structured Thoughts: News for the Financial Services Community, Volume 10, Issue 5 | JD Supra
Updated: May 25, 2018: JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
Structured Thoughts: News for the Financial Services Community, Volume 10, Issue 4 | JD Supra
Updated: May 25, 2018: JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
Structured Thoughts: News for the Financial Services Community, Volume 10, Issue 3 | JD Supra
Updated: May 25, 2018: JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
Structured Thoughts: News for the Financial Services Community, Volume 10, Issue 2 | JD Supra
Updated: May 25, 2018: JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
Structured Thoughts: News for the Financial Services Community, Volume 10, Issue 1 | JD Supra
Updated: May 25, 2018: JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
Structured Thoughts: News for the Financial Services Community, Volume 9, Issue 7 | JD Supra
JD Supra Privacy Policy Updated: May 25, 2018: JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
Structured Thoughts: News for the financial services community Volume 9, Issue 6 | JD Supra
JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations. This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services").
Structured Thoughts: News for the financial services community Volume 9, Issue 5 | JD Supra
JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations. This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services").
Structured Thoughts: News for the financial services community Volume 9, Issue 4 | JD Supra
JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations. This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services").
FINRA Asks Members: What Are You Doing with Digital Assets? | JD Supra
JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations. This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services").
Massachusetts Takes on Risky Broker-Dealers That Offer Private Placements | JD Supra
JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations. This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services").
SEC Proposes Simplified Relationship Summary for Broker-Dealers and Investment Advisers to Use with Retail Investors | JD Supra
This alert is one in a series of Client Alerts on recent SEC proposals regarding regulation of broker-dealers and investment advisers.
FINRA Proposes Amendments to Quantitative Suitability Rules | JD Supra
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The SEC's Standard of Conduct Proposals Would Raise the Bar on Investment Advisers | JD Supra
This alert is one in a series of Client Alerts on recent SEC proposals regarding regulation of broker-dealers and investment advisers.
Structured Thoughts: News for the financial services community Volume 9, Issue 3 | JD Supra
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FINRA 2018 exam priorities: suitability and complex products remain front and center | Lexology
In January 2018, FINRA released its annual examination priorities letter.1 The letter addresses a variety of areas that are important to U.S. broker-dealers. However, as it has in the past, FINRA remains concerned about whether complex products are being properly sold. According to the letter: “As the number and complexity of products available to investors continue to increase, FINRA will continue to assess the adequacy of firms’ controls to meet their suitability obligations.
Structured Thoughts: News for the financial services community Volume 9, Issue 2 | JD Supra
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First State Charges Broker-Dealer in Connection with Violations of DOL Fiduciary Rule | JD Supra
On February 15, 2018, the Enforcement Section of the Massachusetts Securities Division (the “Division”) of the Office of the Secretary of the Commonwealth charged a registered broker-dealer (the “Broker-Dealer”) that operated in Massachusetts with violating its own internal policies designed to ensure compliance with the U.S. Department of Labor’s (the “DOL”) Fiduciary Rule.
Structured Thoughts: News for the financial services community, Volume 9, Issue 2
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FINRA Publishes FAQs on New Measures to Prevent the Financial Exploitation of Seniors
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Understanding the Standard of Care for Broker-Dealers and the Department of Labor’s Fiduciary Rule
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Structured Thoughts: News for the financial services community, Volume 8, Issue 9
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