Weekly Wrap: From the Regulators

Weekly Wrap: From the Regulators

Weekly Wrap: From the Regulators CSA introduces new exemption
Canadian securities regulators are proceeding with a new exemption that will permit issuers to raise money from their existing shareholders without a prospectus

The exemption was designed with the intention of making it easier for companies seeking to raise capital. Initially proposed last year, the exemption was supported by both the industry, and the investors who advisors represent.

SEC releases proposal for new rules to protect clearing agencies
Regulators of U.S. securities have pitched new rules designed to modify the regulation of clearing agencies, which are considered to be crucial to financial markets.

The U.S. Securities and Exchange Commission (SEC) held a vote to propose new rules that would increase the oversight of clearing agencies considered as important to the market, or that are involved in large-scale deals, such as security-based exchanges.

IIROC levels the playing field
In an attempt to reduce the regulatory burden levies upon smaller firms, IIROC is giving heavy consideration to the idea of lowering capital requirements for certain brokers based on the fact that they pose a lower risk of losing clients.

In a recently-published concept paper, IIROC intends to establish lower minimum capital requirements for certain dealers, especially for type 1 and 2 introducing brokers. These firms represent a significantly lower risk of client loss in the event of insolvency. This is because they do not hold any client assets, and if they do, they are very limited.

FINRA cautions against Bitcoin fraud
Virtual currencies like the Bitcoin have been a cause of alarm among U.S. securities regulators, who are warning investors about the risks involved with conducting business or using them.

In a release, FINRA said that the threat of fraud is with virtual currencies pose “a real danger for investors looking to make a quick profit from Bitcoins.” Aside from cautioning investors about the many scams and speculations involved with virtual currencies, the alert detailed the numerous risks involved with the buying, selling and trading of Bitcoins.

OSC proceeds with no-contest settlements
The OSC is forging ahead with the implementation of no-contest settlements to resolve enforcement allegations, which are based on a model commonly used in the U.S.

Additionally, the Ontario regulator plans to introduce four new enforcement policies, which were initially proposed in October 2011. The initiatives seek to accelerate enforcement by encouraging co-operation and decreasing the barriers involved with the settling of allegations.