FiSolve Weekly News Digest: October 9, 2026

Here is what we are reading in the news this week...

SEC Signals Heightened Scrutiny of “Group”

Formation Under Section 13(d)

The U.S. Securities and Exchange Commission issued a Section 21(a) Report arising from its investigation of shareholder engagement activity surrounding the 2021 ExxonMobil Corporation proxy contest, ultimately declining to bring enforcement charges but delivering a significant warning to investment advisers, asset managers, and institutional investors.  The SEC emphasized that a “group” under Section 13(d) can be formed through an implied agreement, understanding, or concerted action, even in the absence of a formal written arrangement, and that coordinated engagement conducted through coalitions or intermediary organizations may create beneficial ownership reporting obligations.  The report serves as a reminder that regulators will evaluate the totality of communications, engagement efforts, voting activity, and other conduct when assessing potential group formation.  For investors whose collective holdings exceed 5% of an issuer, the consequences can include the loss of Schedule 13G eligibility and the need to comply with the more demanding Schedule 13D reporting regime.  While the report focused on activities associated with Climate Action 100+ and the 2021 ExxonMobil Corporation director election, its implications extend broadly to shareholder coalitions, stewardship initiatives, and coordinated investor engagement efforts across the market.  Read more here.

Connecting the Dots: In an AML Case, FINRA

Reminds Firms that Patterns Matter

A recent FINRA enforcement action underscores a recurring regulatory theme: compliance failures often arise not from a single red flag, but from a failure to recognize and investigate patterns of risk.  In the case, FINRA imposed an $800,000 penalty and required the retention of an independent compliance consultant after identifying AML and supervisory deficiencies related to foreign-based small-cap IPO activity.  According to FINRA, multiple warning signs were present, including concentrated trading activity, significant post-IPO price volatility, and customer accounts warranting enhanced scrutiny, along with deficiencies in customer identification and due diligence processes.  The action serves as a reminder that regulators increasingly expect firms to connect disparate risk indicators, escalate concerns appropriately, and implement risk-based supervisory frameworks that evolve alongside business activities.  For boards, management teams, and compliance professionals, the key takeaway is that effective compliance programs must be capable of identifying and responding to emerging patterns before they become regulatory findings.  Read more here.

Survey: Asset Managers Sharpen

Their Focus on Core Strengths

A recent survey from Northern Trust finds that asset managers are pursuing growth with greater discipline, emphasizing core investment and distribution capabilities while outsourcing non-core functions to improve efficiency and scalability.  The study shows a marked increase in firms using outsourcing as part of their strategy, alongside broader adoption of artificial intelligence across operational functions such as data management, quality control, research, and document processing.  Rather than pursuing broad product expansion, many firms are streamlining product offerings, tightening cost controls, and focusing resources where they can best differentiate themselves.  The findings suggest that successful asset managers are increasingly balancing growth ambitions with operational efficiency, leveraging technology and strategic partnerships to enhance competitiveness in a challenging market environment.  Read more here.

SEC Brings Cherry Picking Case

Against Investment Adviser

A U.S. Securities and Exchange Commission enforcement action highlights the ongoing regulatory focus on trade allocation practices and the fiduciary obligations of investment advisers.  The case involves allegations that an adviser with discretionary trading authority engaged in a "cherry-picking" scheme that favored certain accounts through the allocation of trades.  The action underscores the SEC's expectation that advisers maintain fair and consistent allocation methodologies, robust supervisory controls, and sufficient documentation to demonstrate that investment opportunities are distributed equitably among clients.  More broadly, the matter serves as a reminder that regulators continue to scrutinize conflicts of interest, discretionary trading practices, and whether firms' compliance programs are capable of detecting conduct that could disadvantage some clients for the benefit of others.  Read more here.

CFTC Signals Major Next Step Toward a Comprehensive U.S. Crypto Market Framework

The Commodity Futures Trading Commission (CFTC) has issued an Advanced Notice of Proposed Rulemaking seeking public input on the creation of a comprehensive regulatory framework for retail crypto asset transactions and crypto asset markets under its existing authority.  The proposal is designed to establish a uniform national regulatory regime focused on preventing fraud and abusive practices, providing greater regulatory clarity and investor protections, and incorporating industry best practices into formal rules.  The initiative also contemplates the creation of a specialized category of regulated trading venues, referred to as crypto asset markets, tailored specifically for crypto asset transactions.  According to Chairman Michael S. Selig, the effort reflects the CFTC’s commitment to providing regulatory certainty while supporting innovation and strengthening oversight of digital asset markets.  Public comments will be accepted for 60 days following publication in the Federal Register and will help shape any future rulemaking proposals.  Read more here.

FINRA Study: Most Investors Lack Advanced Investment Knowledge, Increasing Their Exposure to Investment Risk

New research by the FINRA Investor Education Foundation and the Stanford Initiative for Financial Decision-Making found that while many investors understand basic investment concepts, only 18% demonstrate advanced investment literacy, particularly with respect to risk-related topics such as interest-rate risk, leverage, diversification, options, and short selling.  Drawing on data from 2,861 investors in the 2024 National Financial Capability Study, the study found that investors with advanced investment knowledge experience meaningfully better outcomes, including lower vulnerability to fraud, greater retirement preparedness, and fewer costly financial behaviors.  The findings suggest that as access to investing continues to expand, investor education efforts should place greater emphasis on understanding risk and recognizing fraud, rather than focusing solely on basic investment terminology and concepts.  Read more here.

ESMA Calls for Changes to Make MiCA Clearer,

Safer and Ready for Emerging Services 

The European Securities and Markets Authority (ESMA) has responded to the European Commission’s public consultation on the review of Markets in Crypto-Assets Regulation (MiCA).  ESMA’s recommendations aim to simplify the framework while improving investor protection and addressing innovative business models, such as decentralised finance (DeFi), staking, lending and borrowing.  ESMA's recommendations include stricter rules for crypto marketing, particularly by influencers, enhanced disclosure of costs and risks, and new requirements for staking, lending, and borrowing services.  The regulator also proposes stronger supervisory powers to combat unauthorized crypto providers, fraud, and non-compliant stablecoins, while introducing clearer standards for decentralized finance (DeFi), hybrid token classification, and a new regulated service category for firms providing access to DeFi protocols. In addition, ESMA advocates streamlining certain authorization and disclosure obligations and encourages the development of a broader framework for tokenized securities and on-chain settlement to support a more integrated European digital capital market.  Read more here.

FCA Seeks to Align Fund Liquidity Terms

with Long-Term Assets

The UK Financial Conduct Authority (FCA) has proposed new rules designed to provide greater clarity and stability for funds investing in illiquid assets such as property and infrastructure.  Under the proposal, investors in certain open-ended funds would generally be required to provide at least 90 days' notice before redeeming their investments, helping fund managers meet withdrawals in an orderly manner and reducing the risk of forced asset sales, redemption suspensions, and investor harm during periods of market stress.  The FCA believes the changes will improve transparency regarding liquidity terms, better align redemption rights with the underlying assets held by the fund, and support greater confidence in private markets.  The proposed framework would also bring UK requirements into line with emerging international liquidity standards, with existing funds given up to two years to come into compliance.  Read more here.

WSJ: The Latest Nuisance on Flights Is

a Zoom Call at 30,000 Feet

According to a report in the Wall Street Journal, high-speed satellite internet from providers such as Starlink expands across commercial airlines, are giving passengers unprecedented ability to stay connected in flight, but the technology is also creating a new source of tension: video meetings, Teams calls, FaceTime conversations, and other real-time communications at 30,000 feet.  The article explores how improved onboard connectivity is blurring the line between travel and the office, leading to growing complaints from fellow travelers who view in-flight conference calls as the latest aviation nuisance.  While many airlines prohibit voice and video calls, enforcement can be challenging, and some international carriers permit them.  The issue has attracted regulatory attention, with bipartisan lawmakers proposing the Quiet Skies Act to prohibit in-flight voice calls, reflecting a broader debate over whether enhanced connectivity should transform aircraft cabins into extensions of the workplace or remain spaces for quiet travel and personal downtime.  Read more here.

FiSolve Issues Client Alert on the Modernization

of FINRA Rule 3290 (OBAs) 

FINRA's new Rule 3290, approved by the SEC on September 15, 2026, significantly reshapes how broker-dealers oversee their registered representatives' outside business activities.  The new rule replaces and consolidates existing Rules 3270 and 3280 into a more risk-based framework.  Rather than requiring review of nearly all compensated outside activities, the new rule concentrates regulatory attention on investment-related activities and private securities transactions that present meaningful risks involving conflicts of interest, customer confusion, investor protection, or selling away.  The rule preserves heightened supervision and approval requirements for private securities transactions, while providing relief for lower-risk activities, certain personal transactions, and advisory activities conducted through unaffiliated registered investment advisers.  Although firms may benefit from reduced compliance burdens in some areas, Rule 3290 places greater emphasis on thoughtful risk assessments, documenting supervisory decisions, monitoring imposed conditions, and updating policies, systems, and training programs to align with the new requirements.  Until the rule becomes effective, firms must continue complying with current Rules 3270 and 3280 while preparing for implementation.  Read the alert authored by Kimberly Johnson here.

💡FiSolve's Negotiation Tip of the Week💡

Mere Exposure

One of the most underappreciated principles in negotiation is the mere exposure effect: people tend to develop greater trust, comfort, and preference for individuals, ideas, and organizations they encounter repeatedly.  In financial services, where credibility and risk assessment drive decision-making, negotiators can benefit by increasing thoughtful, value-driven touchpoints before key discussions.  Rather than relying on a single high-stakes meeting, share insights, market perspectives, industry commentary, or brief updates over time so your counterpart becomes familiar with both you and your thinking.  When negotiations eventually begin, you are no longer perceived as an unknown party presenting a proposal, but as a trusted professional whose presence and expertise are already recognized.  Familiarity does not replace substance, but it often lowers resistance, improves receptivity, and creates a more constructive environment for reaching agreement.

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