The NFA released the attached regulatory notice detailing NFA member obligations under NFA Bylaw 1101, including the prohibition of an NFA Member from carrying an account, accepting an order or handling a transaction in commodity futures contracts for or on behalf of any non-Member of the NFA that is required to be registered with the CFTC as an FCM, IB, CPO, CTA or LTM. According to the Notice, "Bylaw 1101 by its terms imposes strict liability [emphasis supplied] on any Member conducting business with a non-Member that is required to be registered." The notice also refers to a very limited

ICI has filed notice that it intends to appeal the adverse decision in its suit against the CFTC, in which it complained that the CFTC had failed to conduct an adequate cost-benefit analysis of the CFTC's planned expansion of Rule 4.5 to apply to mutual funds. Click here to view the notice of appeal.

The SEC announced that the United States District Court for the Southern District of New York entered a Final Judgment as to former hedge fund manager Raj Rajaratnam in the SEC's insider trading case, SEC v. Rajat K. Gupta and Raj Rajaratnam, Civil Action No. 11-CV-7566 (SDNY) (JSR). Click here to view litigation release in full (links externally to SEC website).

FINRA issued a notice informing members that the staff of the Division of Trading and Markets of the Securities and Exchange Commission has issued a no-action letter setting forth conditions under which broker-dealers may treat certain foreign equity securities as having a "ready market" under Exchange Act Rule 15c3-1(c)(11)(i) and subject to the haircuts under Exchange Act Rule 15c3-1(c)(2)(vi)(J) (the no-action letter). This letter also serves to expand the number of foreign securities eligible as foreign margin stock under Regulation T. We had published an item about the no-action letter

FINRA has filed with the SEC a proposed rule change to amend FINRA Rule 4530 (Reporting Requirements [as to bad events concerning members and their associated persons]). The rule change would: (1) provide an exception from the rule for information disclosed on the Form U4 (Uniform Application for Securities Industry Registration or Transfer); (2) enable members to file required documents with FINRA online; and (3) provide an exception from the rule for findings and actions by FINRA. View text of the proposed rule change (links externally to FINRA website). See also FINRA Rule 4530.