RN 11-40 August 29, 2011 The SEC granted approval to amendments to the FINRA rules that clarify, for purposes of the exception for trade reporting for transactions that are part of a distribution, the term "distribution" has the same meaning as under Regulation M. In addition, the rule change clarifies that transfers of equities for the purpose of redeeming instruments such as ADRs or ETFs are excluded from trade reporting requirements. Firms that rely on the transaction exception for securities part of an "unregistered secondary distribution" are required to give notice to FINRA providing

76 FR 55308 (SEC Release No. IC-29779) September 7, 2011 The SEC published an advance notice of proposed rulemaking regarding amendments being considered to Rule 3a-7 under the Investment Company Act, which provides, in part, a conditional exclusion from the Act to issuers of asset-backed securities. The proposal is intended to consider, among other things, the role of credit ratings in the context of Rule 3a-7 and how holders of asset-backed securities of Rule 3a-7 issuers should be treated under the Act. A related concept release solicited comment on provisions of the Act that might be

76 FR 55237 (SEC Release No. IC-29776) September 7, 2011 The SEC issued a concept release to consider the use of derivatives by registered investment companies. Among other things, the release requests public comment on the use of derivatives in relation to the Investment Company Act's provisions on (i) leverage limitations, (ii) issuance of "senior securities"; (iii) diversification; and (iv) concentration. In addition, the SEC requested public comment on any other issues not directly addressed in the concept release relating to the use of derivatives by investment companies. Comments are due

76 FR XXX (SEC Release No. 34-65263) (SR-MSRB-2011-09) September 6, 2011 The SEC published for comment a proposed interpretive notice of the MSRB concerning the application of MSRB Rule G-17 to underwriters of municipal securities. The MSRB stated that the change was a result of Dodd-Frank's direction that the MSRB explicitly protect municipal entities. The proposed guidance would generally apply a number of conduct rules to municipal underwriters in their communications with issuers. Cross References MSRB Rule G-17

FINRA News Release September 7, 2011 FINRA announced fines against five broker-dealers for understating the amount of total commissions it charged customers and for mischaracterizing a portion of commission charges as fees for "handling services." The cases were the result of a targeted review by FINRA that found that firms were routinely charging customers for handling services that far exceeded the actual cost of such services. The disciplinary action is significant in that it involves firms overcharging in small amounts (that can obviously add up) on agency commissions, as opposed to a more