SDDco Perspective Newsletter

May 2020

Dear SDDco Clients and Colleagues: Our SDDco Perspective includes industry news, guidance, regulatory rule updates, deadlines, and other timely matters impacting brokers, advisors, fintech firms, taxpayers, investors, and their service professionals. The SDDco Perspective is made available on our website monthly at http://sddco.com/resources-newsletter.

CRYPTOCURRENCY

Bryon Lyons
CEO, SDDco Brokerage Advisors, LLC

Bryon Lyons

Blockchain Analytics and Privacy Tools Find a Use Case in Covid-19

As reported in the Harvard Business Review, the need to capture and share data in order to rapidly make more informed decisions, and to manage on both a local and transnational basis the current Covid-19 crisis, has found its solution in the data analytics and privacy tools that have been predominantly utilized in the research and analysis departments of large and boutique financial institutions. The World Health Organization, IBM, Oracle, Microsoft, government agencies, international health organizations, and others have partnered in a very short period of time to build the blockchain-based open data hub called MiPasa, designed to quickly detect Covid-19 carriers and infection hotspots around the world, and to securely share precise verified information among individuals, hospitals, and authorities that will aid in public health analysis.

HBR - How the Pandemic Is Pushing Blockchain Forward

IBM - MiPasa project and IBM Blockchain team on open data platform to support Covid-19 response

MiPasa

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SDDco CYBER
COMPLIANCE & SUPPORT OFFERING

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  • Fully Managed Incident Response Coverage
  • Data Security Training
  • Vendor Due Diligence
  • Risk Assessments

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Speak with an SDDco consultant about how we can help you navigate the nuances of armoring your firm through  SDDco Cyber.

COMPLIANCE & REGULATORY

Ross Marlin
Associate Director

Ross Marlin

FINRA Publishes FAQs Regarding Coronovirus-related Regulatory Relief

On March 24, 2020, FINRA published FAQs summarizing the various forms of temporary relief from FINRA rules and requirements which FINRA has made available to member firms as a result of the coronavirus pandemic. Among the topics addressed are regulatory relief regarding fingerprinting, individual registration, net capital, and qualification examinations.

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LEGAL

Casey Muller
Director of Legal & Internal Compliance

Casey Muller

Beware of COVID-19 related Fraud

COVID-19 has brought on more than just the threat of illness, it has brought with it the threat of securities fraud and bad investments. The SEC reports that they “have become aware of a number of stock promotions, including online and through unsolicited phone calls, claiming that products or services of publicly-traded companies can prevent, detect, or cure COVID-19.” Investors should be extra cautious with any COVID-19 “opportunities”, which, according to the SEC, also includes charitable contributions and investments in “safe” commodities.

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ACCOUNTING & TAX

Bob Fortino
Managing Partner

Bob Fortino

IRS Issues Notice 2020-32 Addressing PPP Loans

The passing of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) established the Paycheck Protection Program for small businesses. These loans are to be used principally for payroll costs of employees, rent, and utilities. These loans were being used to help avoid companies from furloughing their employees during the COVID-19 pandemic. The loan amounts are 2.5 times the average monthly payroll from 2019. Recipients of these loans are hoping that the loans will be forgiven through this program and that they would be able to deduct the payroll costs and allowable rent expense during the 8 week period after receiving the loans (the measurement period). The IRS just published Notice 2020 -32, which effectively bursts the bubble of the companies hoping to take advantage of the double benefit of tax-free income, while being able to deduct the expenses the loans were designed to pay. The notice clearly states “…no deduction is allowed under the Internal Revenue Code (Code) for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a covered loan pursuant to section 1106(b) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Public Law 116-136, 134 Stat. 281, 286-93 (March 27, 2020) and the income associated with the forgiveness is excluded from gross income for purposes of the Code pursuant to section 1106(i) of the CARES Act”. Some taxpayers feel this forgiveness was implied, the IRS does not agree. Unless Congress steps into to clarify the issue further, it looks like expenses related to loan forgiveness are not deductible.

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IN THE SPOTLIGHT

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SDDco makes this general information, the contents of which were not originated from SDDco, available for promotional and educational purposes only. SDDco is not affiliated with any of the authors or publishing entities of the articles herein. SDDco does not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information or any sites linked to in this newsletter.

The information provided should not be construed as legal advice and it is not intended to be a substitute for professional consultation. Please contact a financial services professional, such as SDDco or otherwise, if you have questions regarding the regulatory and compliance industry. This email may constitute an advertisement under U.S. law.

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