UpFront » May 2021

Regulators seem to be moving closer to proposing oversight measures for the cryptocurrency markets. While this has been mulled over for some time, more frequent volatility in cryptocurrencies has increased concerns that greater investor protection regulations are needed. FrontLine’s Founder and President, Amy Lynch, points to how especially Bitcoin’s price fluctuation is influenced by public comments, which indicates a speculative investment. Providing the lead quote, Ms. Lynch states that public comments that in turn create…

SEC Chairman Gary Gensler’s comments on Regulation Best Interest (Reg BI) would likely reinforce the trend of broker-dealers transitioning to the RIA model. For many years the commission-based model has been moving to the fee-based model and now Reg BI provides another reason to make that switch. Plus, Chairman Gensler has recently made it clear that he intends to enforce Reg BI to the letter of the law. Amy Lynch, FrontLine’s Founder and President, identifies…

A FINRA Regulatory Notice issued last year includes statements that its member broker-dealers use of internal rates of return (IRRs) for unrealized investments in marketing materials should be calculated in accordance with GIPS. This has led broker-dealers to seek information from PE funds on how they are complying with the Notice or addressing its guidance. Fund managers have options with respect to the Notice, from preparing GIPS compliant IRRs to removing their obligations under its…

The surge of online trading during the pandemic coupled with events earlier this year surrounding GameStop have posed a challenging situation for regulators. Now being studied by the SEC and other regulators, they are seeking to determine whether new rules should be proposed to curb speculative trading, dampen volatility and increase disclosures as further protections for investors. But to do so may inhibit the small investor’s ability to participate in the market and compete with…