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Mediant Feb 27, 2023 4 min read

Key Regulatory Issues Impacting Brokers: A 2022 Recap

Last year was a busy one for financial services regulation, especially pertaining to broker-dealers. As such, we put together a summary of key 2022 regulatory issues―divided into approved, proposed and items to watch―to help brokers navigate the changing regulatory environment.

Below is an overview of the summary followed by a link to the complete guide.


Shortening the settlement cycle to T+1 

On February 15, 2023, at an open meeting, the SEC approved the rule change that would shorten the settlement cycle to T+1. To take advantage of the three-day weekend, the transition date will be May 28, 2024, which follows Memorial Day in the US. 

10b5-1 Plans Amendments 

On December 14, 2022, the SEC adopted several amendments and new disclosure requirements intended to address what it perceived may be abusive practices relating to Rule 10b5-1 trading plans, certain equity awards and gifts of securities. Significant new provisions include “cooling-off” periods delaying the first trades after a plan is adopted or amended; limitations on the number of Rule 10b5-1 plans an insider may have and on single-trade arrangements; and new required disclosures by issuers about Rule 10b5-1 plans, insider trading policies and option grant practices. 

Tailored Shareholder Reports

On October 26, 2022, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging shareholder reports. In addition, the amendments alter investment company advertising rules to require that fee and expense presentations in registered investment company and business development company advertisements and sales literature be consistent with relevant prospectus fee table presentations and reasonably current.

Amendments to modernize the electronic recordkeeping requirements for broker-dealers

On October 12, 2022, the SEC adopted amendments to the electronic recordkeeping, prompt production of records, and third-party recordkeeping service requirements applicable to broker-dealers, security-based swap dealers, and major security-based swap participants. The amendments will facilitate SEC examinations of these entities and add an audit-trail alternative under which electronic records can be preserved in a manner that permits the re-creation of an original record if it is altered, over-written or erased.

Amendments to rules governing proxy voting advice

On July 13, 2022, the SEC announced adoption of amendments to its rules governing proxy voting advice proposed in November 2021. The final amendments rescind revisions made to two rules applicable to proxy voting advice businesses that the SEC adopted in 2020, including changes made to the proxy rules’ liability provision, and rescinded certain guidance the Commission issued to investment advisers about their proxy voting obligations. 


SEC proposal to require reporting of stock loan transactions

In November 2021, the SEC proposed new Rule 10c-1, which would for the first time require all lenders of securities to provide identifying data and material negotiated terms of securities lending transactions to a registered national securities association – likely FINRA – for public dissemination. The rule would require reporting of certain information within 15 minutes of finalizing the securities loan transaction.

SEC proposed rules for mutual funds and advisers regarding cybersecurity risk management

On February 9, 2022, the SEC proposed to impose extensive new cybersecurity compliance, disclosure, reporting and recordkeeping obligations on federally registered investment advisers, mutual funds and business development companies. The proposal is designed to address concerns about advisers’ and funds’ cybersecurity preparedness and reduce cybersecurity-related risks to clients and investors.

SEC proposal regarding short sale data collection

In two related releases on February 25, 2022, the SEC proposed that Rule 13f-2 would require institutional investment managers exercising investment discretion over short positions meeting specified thresholds to report on Form SHO information relating to end-of-the-month short positions and certain daily activity affecting such short positions.

SEC proposed new oversight requirements for certain services outsourced by investment advisers

This October 26, 2022 proposal would require every federally regulated investment adviser to satisfy explicit requirements before engaging an affiliated or unaffiliated party to perform a range of functions material to the adviser’s investment advisory services. On an ongoing basis, advisers would have to periodically satisfy the same requirements again to monitor each service provider’s performance of a covered function. 


SIFMA calls for standardization and modernization of corporate action announcements and processing

On February 9, 2023, SIFMA announced the issuance of a “U.S. Corporate Actions Standardization Position Paper”. Current regulation in the US does not mandate the standardization of corporate action announcements, leading to fragmentation in processing and inefficiency that will only be of more concern with the movement to T+1 settlement. The paper discusses the standardization effort undertaken by the Australian Securities Exchange in 2014 to transition from manual to straight-through-processing.

A Regulatory Partner

Mediant is actively engaged in the entire lifecycle of regulatory change management, from advocacy to implementation. A key partner in achieving clients’ regulatory and operational objectives, we continually build and provide our clients with tools that enhance and support their compliance needs.

View the complete guide of pertinent 2022 regulations and how they impact you.