SEC, Press Release, SEC Proposes to Enhance Protections and Preserve Choice for Retail Investors in Their Relationships With Investment Professionals (Apr. 18, 2018)

Under proposed Regulation Best Interest, a broker-dealer would be required to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. Regulation Best Interest is designed to make it clear that a broker-dealer may not put its financial interests ahead of the interests of a retail customer in making recommendations.

In addition to the proposed enhancements to the standard of conduct for broker-dealers in Regulation Best Interest, the Commission proposed an interpretation to reaffirm and, in some cases, clarify the Commission’s views of the fiduciary duty that investment advisers owe to their clients. By highlighting principles relevant to the fiduciary duty, investment advisers and their clients would have greater clarity about advisers’ legal obligations.

Next, the Commission proposed to help address investor confusion about the nature of their relationships with investment professionals through a new short-form disclosure document — a customer or client relationship summary. Form CRS would provide retail investors with simple, easy-to-understand information about the nature of their relationship with their investment professional, and would supplement other more detailed disclosures. For advisers, additional information can be found in Form ADV. For broker-dealers, disclosures of the material facts relating to the scope and terms of the relationship would be required under Regulation Best Interest.

Finally, the Commission proposed to restrict certain broker-dealers and their financial professionals from using the terms “adviser” or “advisor” as part of their name or title with retail investors. Investment advisers and broker-dealers would also need to disclose their registration status with the Commission in certain retail investor communications.

via Benjamin P. Edwards

Davis Polk, First Wave of Pay Ratio Disclosures Filed

Financials: 1:1 – 429:1

Health Care: 6.4:1 – 388:1

Industrials: 50:1 – 428:1

Real Estate: 14.84:1 – 111:1

Utilities: 55:1 – 190:1

Energy: 0.9:1 – 25:1

Information Technology: 46:1

Materials: 59.6:1

Telecommunications Services: 85:1

Statistical Sampling. No companies disclosed the use of statistical sampling for purposes of identifying their median employee.

University of Rochester President Resigns Amid Fallout of Harassment Claims Against Professor

Joel Seligman will resign as president of the University of Rochester as the school continues to grapple with fallout from complaints that the school bungled its response to allegations of sexual harassment by a professor.

Wall Street Journal, ‘Fiduciary Rule’ Poised for Second Life Under Trump Administration, Jan. 10, 2018

The Securities and Exchange Commission is accelerating work on its own version of the “fiduciary rule,” a regulation issued by the Labor Department that put restraints on brokers handling retirement accounts. The SEC’s effort would affect all brokerage accounts-not just those for retirement funds-and could ban brokers from calling themselves financial advisers unless they accept a strict duty of loyalty to clients.

U.S. SEC approves request to list quadruple-leveraged ETFs

NEW YORK, May 2 (Reuters) – The Securities and Exchange Commission on Tuesday approved a request to trade quadruple-leveraged exchange-traded funds, marking a first for the growing market for such products in the United States.

The request to list ForceShares Daily 4X US Market Futures Long Fund, under the ticker UP, and ForceShares Daily 4X US Market Futures Short Fund, under the ticker DOWN, was filed by Intercontinental Exchange Inc’s NYSE Arca exchange.

  • Securities and Exchange Commission (Release No. 34–79201; File No. SR-NYSEArca-2016-120)

In the absence of certain stop measures represented by options on futures contracts obtained by a Fund, if the Benchmark moves 25% or more on a given trading day(s) in a direction adverse to a Fund’s holdings, a Fund’s investors would lose all of their money.

Twenty Most-Cited Corporate Law & Securities Regulation Faculty in the United States, 2010-2014 (inclusive)

Rank

Name

School

Citations

Age in 2016

1

John Coffee, Jr.

Columbia University

1470

72

2

Lucian Bebchuk

Harvard University

1130

61

3

Stephen Bainbridge

University of California, Los Angeles

1010

58

4

Reinier Kraakman

Harvard University

  820

67

5

Stephen Choi

New York University

  780

50

6

Donald Langevoort

Georgetown University

  770

65

7

Ronald Gilson

Columbia University

  760

70

8

Lynn Stout

Cornell University

  750

59

9

Roberta Romano

Yale University

  730

64

10

Henry Hansmann

Yale University

  720

71

11

Bernard Black

Northwestern University

  630

63

12

James Cox

Duke University

  620

73

13

Mark Roe

Harvard University

  600

65

14

Jill Fisch

University of Pennsylvania

  580

56

 

Thomas Hazen

University of North Carolilna, Chapel Hill

  580

69

16

William Wilson Bratton

University of Pennsylvania

  550

65

17

Marcel Kahan

New York University

  520

54

18

Steven Davidoff Solomon

University of California, Berkeley

  490

45

19

Jeffrey Gordon

Columbia University

  480

66

 

Robert Thompson

Georgetown University

  480

67

 

Other high-cited scholars who work partly in this area

     
 

Jonathan Macey

Yale University

1260

61

 

David Skeel

University of Pennsylvania

  740

55

via Brian Leiter