On December 16, 2025, the SEC’s Division of Examinations released a new Risk April was a month of consequential regulatory activity across the securities landscape. Several of the month’s most significant developments share a common thread: regulators are pushing for greater transparency, modernized frameworks, and more effective risk management. The SEC moved to clarify expanded execution quality reporting obligations. FINRA overhauled decades-old margin rules and began digitizing its examination request process. The CFTC sharpened its enforcement posture around prediction markets. And FinCEN proposed what may be the most fundamental reform to Bank Secrecy Act compliance in a generation.
At the same time, research from FINRA and advocacy from NASAA highlighted a growing concern about retail investor vulnerability, particularly among social media users and seniors. And at the state level, the ongoing trend of aligning state advertising and continuing education rules with federal frameworks continued to gain momentum.
For compliance teams, the takeaway is consistent: the regulatory environment is moving toward risk-based, technology-enabled oversight, and firms that can systematically track, analyze, and implement changes across jurisdictions will be best positioned to keep pace.
Execution Quality Transparency Expands Under Amended Rule 605
The SEC published new FAQs in April (that become effective August 1, 2026) addressing Rules 600 and 605 of Regulation NMS. The 2024 amendments to Rule 605, among other things, expanded scope of reporting entities to larger broker-dealers (those with 100,000 or more customer accounts).
Compliance teams for large broker-dealers should be reviewing these new FAQs closely and assessing readiness well ahead of August. A structured regulatory change management process, one that tracks new guidance, assigns action items, and documents the firm’s response, can make the difference between a confident compliant, audit-ready posture and a scramble at the deadline.
Prediction Markets Draw Enforcement Attention
Prediction markets, also known as event contract markets, remain firmly in the regulatory spotlight. On March 31, CFTC Division of Enforcement Director David I. Miller identified insider trading, including in the prediction markets, as one of five enforcement priorities in remarks at NYU Law School. He stated the Division will treat misuse of material nonpublic information on prediction markets the same as insider trading on any other CFTC-regulated market, and is also examining these markets for fraudulent trading practices, manipulation, and market abuse.
Miller’s remarks built on recent KalshiEX, LLC disciplinary matters involving misuse of nonpublic information, thus violations of Kalish’s CFTC-approved exchange rules. There were three instances of political candidates trading on their own races. In addition, a YouTube channel editor was found to have traded on advance knowledge of upcoming video content.
Also, the CFTC also published an Advance Notice of Proposed Rulemaking in March seeking public comment on statutory core principles and regulations that apply to prediction markets, the types of event contracts that may be prohibited as contrary to the public interest, cost benefit considerations related to prediction markets, as well as other topics. The comment period ended April 30th. We continue to monitor for formal rulemaking.
For financial services firms, the message is clear: prediction market participation by registered persons may be considered investment-related activity depending on the unique circumstances associated with each event contract and raises conflicts-of-interest and insider trading considerations. Firms with automated conflicts of interest monitoring, including outside business activity and private securities transaction disclosure and approval workflows, are better positioned to identify and manage these emerging risks before they become enforcement issues.
FINRA Modernizes Margin Rules, Retiring the “Pattern Day Trader” Framework
On April 14, the SEC approved FINRA’s amendments to Rule 4210 adopting new intraday margin standards to replace in their entirety the outdated day trading margin requirements, including the day trade count requirements for designating a customer as a “pattern day trader” and the $25,000 pattern day trader minimum equity requirement. The changes eliminate familiar concepts like “pattern day trader” designations and “day trading buying power” calculations, replacing them with a more flexible requirement for firms to monitor and manage intraday margin deficits in customer accounts through either real-time blocking or end-of-day margin calls.
The amendments become effective June 4, 2026, with an 18-month implementation phase-in option extending to October 2027. Firms will need to update policies, procedures, systems, and training to align with the new supervision and surveillance expectations. A closed-loop regulatory change process that connects the new rule to specific policy updates, assigns accountability to business owners, and tracks implementation through to completion is essential for managing a change of this magnitude across operations, compliance, and training functions.
FINRA Rule 8210 Goes Digital
FINRA filed an amendment to Rule 8210 for immediate effectiveness, to deliver information and testimony requests to member firms electronically through the FINRA Gateway, replacing mail delivery. The implementation date is May 26, 2026. Notably, the change applies only to member firms; requests directed to associated persons, including registered representatives, will continue to be delivered by mail or personal service.
The shift in delivery method is straightforward, but Rule 8210 requests themselves remain a significant compliance event, requiring prompt document production, testimony, and written responses in connection with investigations and examinations. Electronic delivery could accelerate response expectations. Firms that lack a structured workflow for tracking, assigning, and responding to regulatory exam requests may want to evaluate whether their current processes are keeping pace. RegEd’s Regulatory Exam Management capabilities are purpose-built to help firms manage exactly this kind of regulatory interaction in a structured, auditable way.
Social Media and Investor Fraud: A Growing Knowledge Gap
The FINRA Investor Education Foundation published a research brief examining the fraud vulnerabilities of retail investors who use social media and “finfluencers” to inform their investment decisions. The findings are striking: social media users answered only 42% of questions correctly on an objective investment knowledge quiz, yet 63% rated their own knowledge as “high.” Among those targeted for fraud, 68–69% of social media users and finfluencer followers lost money, compared to 26–29% of non-users.
The study also found that social media is successfully engaging younger, more diverse investors who might otherwise remain on the sidelines. Sixty percent of investors aged 18–34 use social media for investment decisions. But the combination of overconfidence and low objective knowledge creates a concerning fraud vulnerability.
For firms, this data reinforces the growing regulatory emphasis on investor education, fraud awareness training, and supervision of social media-related activities. Comprehensive compliance education programs, including Firm Element training that addresses fraud awareness and social media risks, are increasingly important. Equally, firms producing social media content and digital advertising should ensure their review and approval processes can keep pace with the volume and velocity of digital communications.
FinCEN Proposes Fundamental BSA/AML Reform
On April 7, FinCEN issued a proposed rule intended to fundamentally reform financial institutions’ AML/CFT programs under the Bank Secrecy Act. The proposal shifts the compliance paradigm from volume-based paperwork to effectiveness-based outcomes, empowering institutions to devote more attention and resources to higher-risk activities rather than lower-risk ones.
Key proposed reforms include elevating risk assessments as a regulatory requirement, distinguishing between program design and implementation deficiencies, clarifying expectations for independent testing and audit functions, and introducing a new notice-and-consultation framework between federal banking supervisors and FinCEN for significant enforcement actions. Comments are due June 9, 2026.
If adopted as proposed, the changes would have broad implications for broker-dealers, mutual funds, and other financial institutions, potentially reshaping how AML/CFT risk assessments are conducted, documented, and examined. FinCEN’s proposal contemplates a 12-month implementation period following issuance of a final rule, so the operational timeline for firms extends well beyond the comment deadline. For firms managing compliance across multiple regulatory domains, having a regulatory change management process that can track a proposal of this scope from comment period through final rule adoption, and connect it to the firm’s policies and procedures, will be critical.
NASAA Advocates for Senior Investor Protections
NASAA published a letter to the U.S. Senate Special Committee on Aging in connection with an April 15 hearing on senior financial literacy and fraud prevention. The letter emphasized the epidemic of scams, including digital asset fraud, crypto scams, social media fraud, impersonation schemes, “pig butchering,” and AI-enabled scams. It also highlighted NASAA’s 2025 Enforcement Report showing state regulators conducted 8,833 active investigations in 2024, resulting in more than $259 million in restitution and fines.
NASAA urged Congress to leverage state regulators as partners in building senior financial literacy and resilience against fraud, a reminder that fraud-related training and investor education continue to be high-priority topics across both federal and state regulatory agendas.
State Securities Activity
Several state-level developments are worth noting:
- Mississippi proposed a rule change to align its investment adviser advertising regulations more closely with the SEC’s IA Marketing Rule.
- Virginia enacted H.B. 479, allowing investment advisers to use client testimonials and endorsements in advertising, reflecting the broader trend of state-level alignment with the SEC’s modernized marketing framework.
- New Jersey and New York released warnings about fraudulent investment schemes proliferating across Meta platforms, including Facebook, Instagram, and WhatsApp.
- Investment Adviser Representative Continuing Education (IAR CE) adoption continues to expand. Illinois implemented its requirement in January 2026, and Indiana is set to implement in January 2027. NASAA also launched a comprehensive online IAR CE course catalog, consolidating course offerings from all approved providers into a single searchable platform.
The expanding patchwork of state advertising rules and IAR CE requirements underscores the challenge of managing multi-jurisdictional compliance, particularly for firms with advisers registered across many states. Automated CE tracking and advertising review solutions can help firms stay current without overwhelming compliance teams.
How RegEd Can Help
RegEd’s Regulatory Change Management solution provides firms with a comprehensive, workflow-enabled approach to identifying, analyzing, and implementing regulatory change across securities markets. Backed by a team of regulatory experts with more than 450 years of combined industry experience, RegEd delivers clear, actionable analysis for new and amended regulations, helping compliance and business teams focus on what matters most.
Complementary solutions, including Compliance Management, Conflicts of Interest monitoring, Advertising Review, Education & Training, and Licensing & Registration, help firms operationalize new requirements across the full compliance lifecycle. Through a closed-loop process that spans awareness, applicability, implementation, and oversight, RegEd helps firms strengthen compliance programs, reinforce accountability, and reduce risk in an increasingly complex regulatory environment.