Financial Services Authority May 3, 2011 The FSA has published a Policy Development Update. The update includes publications issued since the last edition: Quarterly consultation paper No.28; and Use of non-EEA rules in calculating group capital requirements. The update also includes information about recent Handbook-related and other developments, other publications - consumer publications, guidance consultations and finalised guidance and an updated timetable for forthcoming publications.

SEC Release No. 34-64383 May 3, 2011 The SEC published a notice, as required by Dodd-Frank, to solicit public comment on certain studies regarding short sales. In particular, the notice solicits comment on (1) the feasibility of requiring real-time reporting of short sale positions in publicly listed securities; and (2) conducting a pilot program in which all trades in public equities would be marked "long," "short," "market maker short," "buy," or "buy-to-cover," and reported in real-time over the CTA. The notice also solicits public comment on Dodd-Frank's requirement that the SEC adopt

FINRA RN 11-21 May 5, 2011 FINRA announced that recently approved amendments to adopt new FINRA Rule 4360, regarding fidelity bonds, will become effective on Jan. 1, 2012. The new rule is based substantially on NASD Rule 3020 and NYSE 319 and generally requires SIPC members to maintain blanket fidelity bond coverage based on the firm's net capital. Cross References SEC Release No. 34-63961 (adopting release) SEC Release No. 34-63331 (proposing release) FINRA Rule 4360 NASD Rule 3020 NYSE Rule 319

SEC Release No. 34-64386; SR-FINRA-2011-018 May 3, 2011 The SEC published for comment a FINRA proposal to adopt NASD Rule 2830 as FINRA Rule 2341, with significant amendments. The rule generally regulates firm's activities in connection with the sales of securities issued by registered investment companies. Among other things, the FINRA proposal would amend the NASD rule by (1) requiring firms to make new disclosures to investors on cash compensation arrangements; (2) amending the recordkeeping requirements relating to non-cash compensation; (3) eliminating a condition regarding discounted

SEC Litigation Release No. 21960 May 5, 2011 The announced that a federal district court in Florida found the founder and sole owner of a clearing firm liable for aiding and abetting his firm's violations of the Customer Protection Rule and recordkeeping rules. The court found that the defendant knew of the clearing firm's financial problems and "made a substantial effort to conceal it" through directing the firm to falsely record a $5 million money market purchase which artificially lowered the firm's reserve requirement and allowed it to withdraw more from its EBOC account. Cross References