Compliance Regulations and Guidance Affecting your Industry

In general, the new FINRA Know-Your-Customer Rule (2090) requires firms to use “reasonable diligence,” in regard to the opening and maintenance of every account and know the “essential facts” concerning every customer. This rule is modeled after the NYSE Rule 405(1).

The Federal Deposit Insurance Corporation has issued guidance on safeguarding customers against E-mail and Internet-Related Fraudulent Schemes.

In November 2007, Australia instituted the Australian Prudential Standard, APS 115 Capital Adequacy: Advanced Measurement Approaches to Operational Risk, under the Banking Act. This standard sets out the requirements that an authorized deposit-taking institution (that has approval to use an advanced measurement approach to operational risk) must meet both at the time of initial implementation and on an ongoing basis for regulatory capital purposes.

In April 2010, the Public Company Accounting Oversight Board (PCAOB) issued a guidance or Staff Practice Audit Alert, Auditor Considerations Regarding Significant Unusual Transactions, aimed at advising auditors on how they should handle significant unusual transactions while auditing a company.

In October 2011, the Federal Reserve Board approved a final rule that will implement the resolution plan requirement, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This important financial regulation requires bank holding companies with assets of $50 billion or more and nonbank financial firms designated by the Financial Stability Oversight Council for supervision by the Board to annually submit resolution plans to the Board and the Federal Deposit Insurance Corporation (FDIC). This rule will come into effect from November 30, 2011.

The US Federal Reserve Board’s Regulation P or Privacy of Consumer Financial Information (12 CFR 216) regulates the use of nonpublic personal information about consumers by financial institutions.

In 1994 the European Commission issued a Directive on Deposit Guarantee Schemes that aimed at protecting bank account holders in case of banks failing. After the 2008 financial crisis, the EU member states decided to increase the level of deposit protection and new Deposit Guarantee Scheme requirements were implemented and became effective in 2010.

In July 2011, the European Commission modified its Capital Requirements Directive to strengthen the stability of European banks. Rules under this proposed directive, known as CRD IV, is expected to be in place by the end of 2012 and banks across the EU are expected to comply by 2019.

The European Union’s Transparency Directive or TD was implemented to harmonize the transparency requirements for information about issuers whose securities are admitted to trading on a regulated market.

In September 2010, global banking regulators issued new rules that required banks to increase their capital reserves in order to avoid calamitous situations that unfolded after the financial crisis in 2007.

This package deal is known as Basel III.

The Securities Act of 1933 is a federal legislation that regulates the offer and sale of securities. It was enacted after the stock market crash of 1929 and the ensuing Great Depression.

The White House has announced plans for an ambitious regulatory reform across federal departments and agencies. This is the final regulatory reform plan of the Small Business Administration.

The White House has announced plans for an ambitious regulatory reform across federal departments and agencies. This is the final regulatory reform plan of the Department of the Treasury.

The White House has announced plans for an ambitious regulatory reform across federal departments and agencies. This is the final regulatory reform plan of the Department of Commerce.