On July 21, 2021, the Securities and Exchange Commission’s Division of Examinations issued a Risk Alert on cross trades and principal transactions.1 The Risk Alert’s guidance and warnings were based on over 20 examinations of...more
In the last three weeks, the Division of Enforcement of the U.S. Securities and Exchange Commission has filed several complaints and resolved a number of open enforcement actions involving investment advisers. At first...more
Key Point -
As of September 30, 2021, private fund managers registered with the CFTC as CPOs or CTAs will be required, under new NFA guidance, to supervise certain third-parties performing regulatory functions....more
The Securities and Exchange Commission’s (SEC, or Commission) Division of Examinations (Division) recently issued a Risk Alert highlighting staff observations from examinations of investment advisers, registered investment...more
In a recent precedential decision, the 2nd Circuit held that funds could delegate beneficial ownership to their investment managers, thereby eliminating the funds’ disgorgement liability under Section 16(b) of the Securities...more
12/4/2020
/ Amicus Briefs ,
Appellate Courts ,
Beneficial Owner ,
Disgorgement ,
General Partnerships ,
Investment Adviser ,
Investment Management ,
Limited Partnerships ,
Section 16 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
U.S. persons who provided or received any financial services, such as investment advisory services, fund management or brokerage services, to or from non-U.S. persons during 2019 (“Reporters”) must file a Form BE-180 report...more
- The OCIE of the SEC highlights that responses to COVID-19 present important regulatory and compliance issues for SEC registrants, including “heightened risks of misconduct” tied to recent market volatility.
- The Risk...more
8/21/2020
/ Asset Management ,
Broker-Dealer ,
Business Continuity Plans ,
Business Operations ,
Compliance ,
Conflicts of Interest ,
Coronavirus/COVID-19 ,
Cybersecurity ,
Data Protection ,
Fees ,
Financial Transactions ,
Investment Adviser ,
Investment Fraud ,
Investment Management ,
Investors ,
OCIE ,
Personally Identifiable Information ,
Policies and Procedures ,
Popular ,
Remote Working ,
Risk Alert ,
Securities and Exchange Commission (SEC) ,
Supervision
On July 10, 2020, the Securities and Exchange Commission (SEC) proposed to increase the filing threshold for Form 13F to $3.5 billion (35 times larger than the current $100 million threshold), revise the requirements for...more
- The 2nd Circuit has affirmed two lower court decisions dismissing complaints alleging violations of Section 16(b) of the Securities Exchange Act. In so holding, the 2nd Circuit ruled that an investment advisor’s client does...more
On March 13, 2020, the Securities and Exchange Commission (SEC) issued an order that provides relief to registered investment advisers (RIA) and exempt reporting advisers (ERA) that are unable to meet the filing deadline dues...more
In this episode, Akin Gump investment management partners Barbara Niederkofler and Jason Daniel discuss the Security and Exchange Commission’s proposed modernization of the advertising and cash solicitation rules under the...more
1/10/2020
/ Advertising ,
Books & Records ,
Cash Solicitation Rule ,
Conflicts of Interest ,
Disclosure Requirements ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Investment Funds ,
Investment Management ,
Investors ,
Pooled Investment Vehicles ,
Proposed Amendments ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Transactions
On December 19, 2019, the Financial Industry Regulatory Authority, Inc. (FINRA) adopted amendments to Rules 5130 and 5131 (the “New Issues Rules”) to permit allocations of initial public offering (IPO) profits to certain...more
12/31/2019
/ Allocation of Funds ,
Amended Rules ,
Broker-Dealer ,
Covered Person ,
Employee Benefits ,
Exemptions ,
Family Offices ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Services Industry ,
Foreign Corporations ,
Foreign Investment ,
Foreign Offerings ,
Initial Public Offering (IPO) ,
Investment Adviser ,
Investment Companies ,
Investment Funds ,
Investment Management ,
Investors ,
Pension Funds
• Effective January 1, 2020, clarifying amendments to rules regarding communications with the public and use of promotional material will go into effect.
• Effective February 1, 2020, CTA will be subject to new limitations...more
12/27/2019
/ Amended Rules ,
Asset Management ,
Brokers ,
Business Development Companies ,
CFTC ,
Commodity Pool ,
Commodity Trading Advisors (CTAs) ,
Compliance ,
CPOs ,
Electronic Communications ,
Exemptions ,
Family Offices ,
Investment Adviser ,
Investment Companies ,
Investment Management ,
NFA ,
Offshore Funds ,
Registration Requirement ,
Reporting Requirements ,
Securities and Exchange Commission (SEC)
On November 5, 2019, the Securities and Exchange Commission (SEC) proposed amendments to Securities Exchange Act Rule 14a-8, which requires a public company to include shareholder proposals in the company’s own proxy...more
11/18/2019
/ Anti-Fraud Provisions ,
Comment Period ,
Investment Adviser ,
No-Action Requests ,
Proposed Amendments ,
Proxy Advisory Firms ,
Proxy Season ,
Proxy Solicitations ,
Proxy Voting Guidelines ,
Public Comment ,
Rule 14a-8 ,
Rulemaking Process ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Shareholder Proposals
On September 12, 2019, the Commodity Futures Trading Commission (CFTC) announced a settlement with Phillip Capital Inc. (PCI or the “Company”), a registered futures commission merchant (FCM), after hackers successfully...more
10/14/2019
/ CFTC ,
Chief Compliance Officers ,
Cybersecurity ,
Data Breach ,
Data Security ,
Enforcement Actions ,
Information Systems Security Program (ISSP) ,
Investment Adviser ,
National Futures Association ,
Phishing Scams ,
Policies and Procedures
While the Securities and Exchange Commission (SEC) brought several enforcement actions in 2018-19, the most significant new developments were published interpretations and alerts. Other agencies, such as the Commodity Futures...more
10/7/2019
/ AML/CFT ,
Anti-Corruption ,
CFTC ,
Compliance ,
Duty of Loyalty ,
Enforcement Actions ,
EU ,
Fiduciary Duty ,
FinCEN ,
Form ADV ,
Form CRS ,
Investment Adviser ,
OCIE ,
Private Funds ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC) ,
Voting Securities
On August 21, 2019, the Securities and Exchange Commission (SEC) voted 3 to 2 to adopt new interpretive guidance (the “Voting Interpretation”) applicable to investment advisers regarding their proxy voting responsibilities as...more
9/6/2019
/ Conflicts of Interest ,
Disclosure Requirements ,
Duty of Care ,
Fiduciary Duty ,
Informed Consent ,
Investment Adviser ,
Investment Management ,
Investors ,
Policies and Procedures ,
Proxy Advisors ,
Proxy Advisory Firms ,
Proxy Voting ,
Proxy Voting Guidelines ,
Securities and Exchange Commission (SEC) ,
Supervision
On June 5, 2019, the Securities and Exchange Commission (SEC) adopted a comprehensive interpretation (the “Interpretation”) of the fiduciary duties that investment advisers owe to their clients under the Investment Advisers...more
6/13/2019
/ Best Interest Standard ,
Broker-Dealer ,
Conflicts of Interest ,
Duty of Care ,
Duty of Loyalty ,
Enforcement Actions ,
Fiduciary Duty ,
Financial Services Industry ,
Informed Consent ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Retail Investors ,
Securities and Exchange Commission (SEC)
• On May 23, 2019, the Securities and Exchange Commission’s (SEC) Office of Compliance Inspections and Examinations (OCIE) issued a Risk Alert describing its observations in past examinations of weaknesses and best practices...more
5/29/2019
/ Broker-Dealer ,
Cloud Storage ,
Customer Information ,
Cyber Threats ,
Cybersecurity ,
Data Protection ,
Data Security ,
Data Storage Providers ,
Identity Theft ,
Identity Theft Red Flags Rule ,
Investment Adviser ,
OCIE ,
Policies and Procedures ,
Regulation S-ID ,
Regulation S-P ,
Regulatory Requirements ,
Risk Alert ,
Safeguards Rule ,
Securities and Exchange Commission (SEC) ,
Third-Party Service Provider ,
Vendors
On December 20, 2018, the staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (SEC) issued conditional no-action relief to Madison Capital Funding LLC (“Madison”), clarifying...more
• On December 14, the SEC’s OCIE issued a Risk Alert summarizing the findings of its limited-scope examination initiative relating to electronic messaging.
• Noting a “pervasive use” of electronic messaging by adviser...more
12/18/2018
/ Best Practices ,
Books & Records ,
Bring Your Own Device (BYOD) ,
Cybersecurity ,
Electronic Communications ,
Email Policies ,
Employee Training ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
New Guidance ,
OCIE ,
Policies and Procedures ,
Recordkeeping Requirements ,
Risk Alert ,
Risk Mitigation ,
Securities and Exchange Commission (SEC) ,
Text Messages
Despite the new administration, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have both continued to make novel interpretations and to bring enforcement actions that break...more
10/11/2018
/ Acquisitions ,
Administrative Law Judge (ALJ) ,
Advertising ,
Anti-Money Laundering ,
Broker-Dealer ,
CFTC ,
Counter-Terrorist ,
Cryptocurrency ,
Enforcement Actions ,
EU ,
Fiduciary Duty ,
FinCEN ,
General Data Protection Regulation (GDPR) ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Investment Management ,
Mergers ,
NFA ,
Registered Investment Companies (RICs) ,
Securities and Exchange Commission (SEC) ,
Volcker Rule
• The U.S. Securities and Exchange Commission (SEC) staff made official statements regarding when a token may or may no longer be a security
• The SEC continued to bring actions related to cryptocurrency offerings against...more
9/24/2018
/ Anti-Money Laundering ,
Banking Sector ,
Bitcoin ,
Broker-Dealer ,
CFTC ,
Commodities ,
Counter-Terrorist ,
Cryptocurrency ,
Customer Due Diligence (CDD) ,
Digital Currency ,
Disclosure Requirements ,
Enforcement Actions ,
Exchange-Traded Products ,
FATF ,
Financial Institutions ,
FinTech ,
Income Taxes ,
Initial Coin Offering (ICOs) ,
Investment Adviser ,
Investment Company Act of 1940 ,
IRS ,
Jurisdiction ,
Motion to Dismiss ,
National Futures Association ,
Popular ,
Reporting Requirements ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Token Sales ,
Trading Platforms ,
U.S. Treasury ,
Unregistered Securities ,
Virtual Currency ,
Websites
On April 18, 2018, the Securities and Exchange Commission (SEC) proposed a new interpretation (the “Proposed Interpretation”) of the fiduciary duties of investment advisers under the Investment Advisers Act of 1940, as...more
5/8/2018
/ Best Interest Standard ,
Broker-Dealer ,
Conflicts of Interest ,
Duty of Care ,
Duty of Loyalty ,
Enforcement Actions ,
Fiduciary Duty ,
Financial Services Industry ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Retail Investors ,
Securities and Exchange Commission (SEC)
Introduction -
Despite an anticipated de-regulatory push, there are significant new regulatory concerns for investment advisers to address in connection with their annual review of their compliance manuals....more
10/12/2017
/ Bad Actors ,
Bureau of Economic Analysis ,
CFTC ,
Cryptocurrency ,
Custody Rule ,
Cybersecurity ,
Department of Justice (DOJ) ,
Disclosure Requirements ,
Electronic Communications ,
Employee Retirement Income Security Act (ERISA) ,
EU ,
Financial Industry Regulatory Authority (FINRA) ,
Foreign Direct Investment ,
Form ADV ,
Fund Expenses ,
GAAP ,
General Data Protection Regulation (GDPR) ,
Hedge Funds ,
Insider Trading ,
Investment Adviser ,
Investment Management ,
IRS ,
MiFID II ,
NFA ,
Pay-To-Play ,
Private Equity Funds ,
Private Funds ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Tax Audits