IOSCO just released their final report on Principles for the Regulation of Exchange Traded Funds. The report contains nine principles intended to guide the regulation of ETFs. The report states that it is a response to the sharp increase in interest worldwide in assets managed under ETF structures. Lofchie Comment: The opening pages of the report contain a nice summary of certain of the basic concepts around ETFs. The regulatory recommendations seem generally consistent with existing principles of U.S. securities regulations. See: IOSCO Final Report.

FINRA filed with the SEC a series of proposed rule changes to adopt a consolidated set of FINRA supervision rules. The rule change would largely replace existing supervision rules with a new, more flexible set of supervision rules. These amendments are intended to enable FINRA member firms to tailor their procedures to reflect their business, size and organizational structure. Lofchie Comment:Although none of the individual changes appear material, there are quite a number of small changes, as well as changes in the relevant rules. Accordingly, many of a firm's compliance procedures will have

June 30, 2013 is the compliance date for the portfolio reconciliation and swap trading relationship documentation requirements set forth in CFTC Rules 23.502 ("Portfolio reconciliation") and 23.504 ("Swap trading relationship documentation"). Accordingly, provisionally registered swap dealers ("SDs") and major swap participants ("MSPs") are required to submit policies and procedures relating to those requirements no later than Monday, July 1, 2013 (but the NFA cautioned that earlier would be better). Registrants are not required to submit policies and procedures with respect to trades with non

Commissioner Chilton focused on the regulation of "market cheetahs" (high-frequency traders) in his keynote address to the Trading Show Chicago 2013. Chilton highlighted HR 2292, the PROTECT Act, sponsored by Congressman Ed Markey, which would require registration, testing, kill switches, and increased penalties for violations of the CEA by high-frequency traders. Chilton also discussed what he views as several problems and potential solutions associated with high-frequency trading: The volume of trading done by cheetahs today; Potential problems associated with fantasy liquidity created by

The SEC has approved amendments to MSRB Rules G-37 ("Political Contributions and Prohibitions on Municipal Securities Business") and G-8 ("Books and Records to Be Made by Brokers, Dealers, and Municipal Securities Dealers"), requiring additional public disclosure of information related to broker, dealer, and municipal securities dealer contributions to ballot campaigns. The Rule G-37 amendments will add greater specificity to public disclosures concerning contributions made by dealers and dealer personnel to bond ballot campaigns and any municipal securities business awarded as a result of the