July 27, 2007

A New Regulator is Born: FINRA Lives!

The SEC has finally approved the consolidation of the member firm regulatory functions of the NASD and the NYSE. This combined organization will be responsible for regulating all securities firms that do business with the public, as well as operating things like trade reporting facilities and other over-the-counter operations. The new self-regulatory organization also regulates The Nasdaq Stock Market, the AMEX, and the International Securities Exchange under contracts with those organizations. NYSE Regulation, Inc. will continue to be responsible for the regulatory oversight of trading on the NYSE. This regulatory consolidation will not affect the individual exchanges’ regulation of their own listed companies.

The new SRO will be called the Financial Industry Regulatory Authority, or FINRA. It was originally contemplated that the entity would be known as the Securities Industry Regulatory Authority, or SIRA. Unfortunately, as this WSJ article notes, SIRA sounded too much like the Arabic word commonly spelled Sirah, which refers to the biographies of the Prophet Muhammad. After receiving complaints from those who found the SIRA acronym offensive, the already embattled regulator quickly scrapped the name in favor of the more catchy “FINRA.”

Now FINRA is coming under fire, as the National Association of Professional Financial Advisors (with an acronym of NAPFA that doesn’t exactly roll off the tongue) complained in a press release that investors will be confused by the broad scope of the new regulator’s name. NAPFA believes that the sweeping name implies FINRA will have authority over all professionals offering financial products and services, when in fact FINRA has no regulatory sway over financial planners and registered investment advisers. A similar complaint was raised by the Financial Planning Association (FPA).

Caught up in the spirit of all this complaining, I will register a couple of my concerns with this new name. First off, if you didn’t know any better, it sounds like the Financial Industry Regulatory Authority regulates the SEC, rather than the other way around. Second, I am not too crazy about the term “authority.” I guess it reminds me too much of names like “port authority.” Ultimately, I suppose the name won’t matter too much as long as this new SRO regulates the industry in a way that promotes investor confidence in our brokers and markets.

Reverse Mergers: Latest Developments

We have posted the transcript from our recent webcast: “Reverse Mergers: Latest Developments.”

Using Technology to Manage Rule 10b5-1 Plans

In this podcast, Greg Besner of Restricted Stock Systems provides some insight into how the latest technologies can facilitate administering Rule 10b5-1 plans, including:

– What are the latest tweaks to the Restricted Stock System’s compliance software?
– How does it work with Rule 10b5-1 plans?
– What questions do clients typically ask regarding these plans and your software?

Hotel Nearly Full: Call Now

Even though we are several months from the Conference dates, the San Francisco Marriott is nearly sold out for all nights related to these four Conferences:

– “Tackling Your 2008 Compensation Disclosures: The 2nd Annual Proxy Disclosure Conference” (10/9)
– “Hot Topics and Practical Guidance Conference: The Corporate Counsel Speaks” (10/10)
– “4th Annual Executive Compensation Conference” (10/11)
– “15th Annual NASPP Conference” (10/10-12)

Here is information about Hotel/Travel Discounts; use this to make your reservation TODAY – and make sure you mention the NASPP to get a discount.

If you call for a room and the Marriott tells you it is sold out, we have reserved rooms at the Westin Market Street (which is located on the same city block as the Marriott). If you are having any problems at all, it is important that you contact us at or 925.685.5111. Of course, you should also register for the Conferences you plan to attend.

Member Appreciation Package: For those watching via webcast, don’t forget the Member Appreciation Package to catch these October Conferences by video webcast.

Catch Corp Fin Director John White and Associate Director Paula Dubberly talk about how you should be preparing your executive compensation disclosures for next proxy season, among many other hot topics and key speakers. This will be three days of practical guidance that you will want to refer to over and over again.

– Dave Lynn