Broker-Dealer Regulation (Paz)
Faculty
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| Marlon Quintanilla Paz Lecturer in Law mquintan@law.upenn.edu |
Additional Information
Satisfies Senior Writing RequirementNo
Class meets in person.
Meeting Times/Location
M 4:30PM - 6:20PM
Silverman Hall 280
Category
Upper-Level
Credits
2.0
The capital markets have evolved considerably since 24 stockbrokers met outdoors on Wall Street to sign the “Buttonwood Agreement” in 1792. From curb-brokers, trading at coffee houses, exchange floors, algorithmic trading, digital or cryptography-based assets, etc., globalization and the advent of technology often is credited for shaping the modern markets.
The need for the U.S. Securities and Exchange Commission was not met with its creation – in recent times, the U.S. capital markets have faced some of the most significant challenges, such as the implosion of subprime mortgages, the collapse of several of the largest brokerage houses, the failure of auctions for auction-rate securities, the liquidity crisis in asset-backed securities, the financial crisis, and the Ponzi scheme by Bernard Madoff. Amid challenges, the pace of development has increased – for example, broker-dealers have to consider the trading of custody of crypto-assets.
This course will cover the operation and regulation of brokerage firms in the securities markets, as well as the securities markets themselves. We will study specialized SEC and self-regulatory organization rules that regulate the activities of Wall Street firms in connection with the underwriting, advice, trading, or custody of securities as well as anti-fraud concepts. The course will evaluate the duties of broker-dealers to customers, Regulations Best Interest, as well as survey sales practice, trading practice rules, and financial responsibility rules.
We will explore the increasingly complex questions raised as world markets continue to converge, examine recent trends and proposed regulation in this area, and consider the appropriate bounds of U.S. regulation when foreign markets, financial institutions, and investors interact. We will consider relevant changes enacted by the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Jumpstart Our Business Startups Act, and recent rulemaking. Throughout the course, we will examine modern practices at large and small brokerage houses – from synthetic prime brokerage to no-fee brokerage and the specialized products they deal in, from credit default swaps to crypto-assets.