The SEC charged four brokers who formerly worked on the cash desk at a New York-based broker-dealer with illegally overcharging customers $18.7 million by using hidden markups/markdowns and secretly keeping portions of profitable customer trades. According to the SEC's complaint, the brokers were employed at an interdealer broker firm. Cross-Reference(s): Securities Act Sec. 17(a); Exchange Act Sec. 10(b) and Rule 10b-5. View complaint in full here (links externally to SEC website). See also: Press Release

According to these estimates, large banks are going to have to spend some serious time collecting information. If we assume, as is sometimes the case, that the time estimates are understated, one can see some of the reason why banks' expenses will rise. Cross-Reference(s): Dodd-Frank Section 165 (enhanced supervision and prudential standards for nonbank financial companies supervised by the Board of Governors and certain bank holding companies). View notice in full here (links externally to GPO website).

In a speech at SIFMA's 15th Annual Market Structure Conference, Commissioner Gallagher suggests that the basic premises on which the self-regulatory framework was developed (in the context of private, mutualized exchanges) no longer hold. He goes on to state that the SEC needs to reconsider the role of exchanges as SROs, and questions whether FINRA has become a "deputy SEC." And if it is the case that FINRA has developed into a deputy SEC, Gallagher asks the following: Should FINRA's regulatory responsibility be expanded beyond the broker-dealer industry, "such as regulating investment

SIFMA provided the following comments to the SEC on the "Notice of Filing of Proposed Amendments to the Real-Time Transaction Reporting System Information System and Subscription Service" (File Number SR-MSRB-2012-07), a proposal by the MSRB related to large-size trade reports on the MSRB's Real-Time Transaction Reporting System (RTRS). In this letter, SIMFA states its support for the MSRB Proposal and urges the SEC to approve the rule change as proposed, but without assuming that further changes to the rule will be made. View comment letter here (links externally to SIFMA website).

NFA Rule 402 (Waiver of Testing Required) had been amended, effective as of October 3, 2012. View amended rule here (links externally to NFA website).