October 2006 Archives
NYSE Proposes to Eliminate Discretionary Broker Voting for Director Elections
The NYSE has proposed a rule change to the SEC to eliminate broker discretionary voting for board of director elections. The proposal follows recommendations of the roxy Working Group (PWG), which was created in April 2005 by the NYSE to review the proxy voting process. The proposed amendment would apply to shareholder meetings held on or after January 1, 2008, except to the extent that a meeting was originally scheduled to be held in 2007 but was adjourned to 2008.
SEC Expands Class Relief for Trading in Exchange Traded Funds
On October, 24, 2006, the SEC’s Division of Market Regulation issued class relief from certain rules under the Securities Exchange Act of 1934 (the Exchange Act) for Exchange Traded Funds (ETFs). The class relief expands the scope of previous class relief that the Division issued in 2001 and applies to both Creation Unit transactions and secondary market transactions in ETFs. Specifically, the class relief provides exemptive and no-action relief, as well as interpretive advice, with respect to Rules 10a-1, 10b-17, and 14e-5 under the Exchange Act; Rules 101 and 102 of Regulation M; and Rule 200(g) of Regulation SHO for ETFs that meet certain conditions.
Morgan Lewis Obtains SEC Staff No-Action Relief Relating to Closed-End Fund Shelf Offering
Morgan Lewis recently obtained a noa-ction letter for the Nuveen Virginia Premium Income Municipal Fund (Fund) in which the SEC staff stated that it would not recommend an enforcement action under either Section 5 or 6(a) of the Securities Act of 1933 (the Securities Act) if the Fund conducts a delayed “at the market” public offering of its common shares pursuant to the shelf registration provisions of Rule 415(a)(1)(x) and Rule 415(a)(4) under the Securities Act without filing and sending to shareholders quarterly reports that comply in all material respects with the disclosure requirements of Form 10-Q.
Congress Passes Financial Services Regulatory Relief Act, Timetable for Enactment of Final Rules Under Gramm-Leach-Bliley Act
On September 30, 2006, Congress passed the Financial Services Regulatory Relief Act of 2006 (the Act). The President is expected to sign the legislation into law. The Act largely affects the activities of banking institutions and, in several respects, affects banks that engage in certain types of securities business,
NASD Issues Notice to Members Regarding Amendments to Best Execution Obligations
Today, NASD issued Notice to Members (NTM) 0658 announcing amendments and interpretive material to Rule 2320(a), NASD’s “Best Execution Rule.” The amendments to Rule 2320(a) clarify that best execution obligations generally apply to any customer of another brokerdealer as well as to the member’s own customers. In addition, the amendments modify certain terminology and provisions under Rule 2320(a) to reflect current market structure and practice. NASD also has adopted IM2320, which codifies previous interpretive guidance regarding the application of Rule 2320(a). The amendments and interpretive material become effective on November 8, 2006.
FinCEN Publishes Interpretive Guidance on Mutual Fund Suspicious Activity Reporting Requirements Effective October 31, 2006
On May 4, 2006, the Financial Crimes Enforcement Network (FinCEN) published the final rule creating a suspicious activity reporting requirement (SAR) for openend investment companies registered with the Securities Exchange Commission under the Investment Company Act of 1940 (mutual funds) in the Federal Register. Since that date, the industry has anticipated the publication of interpretive guidance from FinCEN on how to apply the final rule to mutual fund transactions.
Congress Passes Financial Services Regulatory Relief Act, Timetable for Enactment of Final Rules Under Gramm-Leach-Bliley Act
On September 30, 2006, Congress passed the Financial Services Regulatory Relief Act of 2006 (the Act). The President is expected to sign the legislation into law. The Act largely affects the activities of banking institutions and, in several respects, affects banks that engage in certain types of securities business,