The SEC’s Division of Investment Management published regulatory guidance on June 28, 2016, highlighting the need for registered investment company complexes to review their business continuity plans to ensure they are...more
Add fund administrators to the list of service providers the SEC expects to act as “gatekeepers.” In two separate settled actions last week, the SEC found that a private fund administrator “caused” the managers’ unregistered...more
Structured Notes Offered on an Agency Basis -
In our last issue, we discussed the potential impact of the Department of Labor’s new rules on sales of structured products. In that article, we discussed some of the...more
5/31/2016
/ Comment Period ,
Debt ,
Department of Labor (DOL) ,
Deposit Accounts ,
FDIC ,
Financial Industry Regulatory Authority (FINRA) ,
Offerings ,
Recordkeeping Requirements ,
Regulation S-K ,
Retirement Plan ,
Securities and Exchange Commission (SEC) ,
Structured Financial Products ,
Underwriting
On May 23, 2016, at FINRA’s annual conference in Washington, D.C., Richard Ketchum, FINRA’s chairman and CEO, delivered a speech that shed a little light on FINRA’s recent sweep letter relating to firm culture....more
The SEC recently approved FINRA’s new Rule 2273 (Educational Communication Related to Recruitment Practices and Account Transfers), which requires delivery of an educational communication prepared by FINRA to customers of a...more
Regulation -
Department of Labor Issues Fiduciary Regulations Under ERISA -
The Department of Labor (DOL) issued its long-anticipated final regulation (the “Regulation”) defining who is a fiduciary as a result of...more
2016 has arrived and, with the new year, FINRA has published its agenda of key examination priorities. This year’s 13-page Regulatory and Examination Priorities Letter sets forth both long-standing and new items for firms to...more
On November 19, 2015, the SEC sanctioned a registered investment adviser, its two owners, and a former chief compliance officer for violating the Advisers Act “custody rule” after previously settling similar charges and...more
Regulation -
OCIE Cautions Advisers on Outsourcing Compliance Activities:
In a Risk Alert dated November 9, 2015, the SEC’s Office of Compliance Inspections and Examinations (OCIE) said it found that outsourced...more
11/18/2015
/ Alternative Investment Fund Managers Directive (AIFMD) ,
Anti-Money Laundering ,
CFTC ,
Compliance ,
Cybersecurity ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Investment Management ,
Investor Protection ,
OCIE ,
Outsourcing ,
Securities and Exchange Commission (SEC) ,
Swap Dealers ,
Swing Pricing ,
Volcker Rule
The SEC found that a registered investment adviser that operates as a “manager of managers” misstated a sub-adviser’s investment performance in communications with its clients, potential clients and the SEC. According to the...more
In a Risk Alert dated November 9, 2015, the SEC’s Office of Compliance Inspections and Examinations (OCIE) said it found that outsourced compliance programs are generally effective, but some of these arrangements leave room...more
The SEC settled charges with two investment advisers to a closed-end fund based on allegations that the advisers failed to adequately disclose a change in investment strategy to the fund’s board and its investors. The SEC...more
10/22/2015
/ Board of Directors ,
Civil Monetary Penalty ,
Compensatory Damages ,
Credit Default Swaps ,
Derivatives ,
Disclosure Requirements ,
Failure To Disclose ,
Investment Adviser ,
Joint and Several Liability ,
Misrepresentation ,
Neither Admit Nor Deny Settlements ,
Offering Documents ,
Proposed Regulation ,
Securities and Exchange Commission (SEC) ,
Shareholders
The SEC recently adopted rule amendments removing credit rating references in Rule 2a-7 and Form N-MFP. Issuer diversification provisions were also amended to eliminate a current exclusion for securities subject to a...more
9/25/2015
/ Amended Regulation ,
Asset Diversification ,
Board of Directors ,
Credit Ratings ,
Duty to Monitor ,
Guarantors ,
Money Market Funds ,
New Guidance ,
NRSRO ,
Risk Assessment ,
Securities and Exchange Commission (SEC)
A registered investment adviser agreed to settle SEC charges that it failed to adopt adequate cybersecurity policies and procedures reasonably designed to protect customer records and information as required by Rule 30(a) of...more
9/25/2015
/ Civil Monetary Penalty ,
Cyber Incident Reporting ,
Cybersecurity ,
Data Breach ,
Data Privacy ,
Data Protection ,
Data Security ,
Encryption ,
Free Identity Theft Protection ,
Hackers ,
Neither Admit Nor Deny Settlements ,
OCIE ,
Personally Identifiable Information ,
Policies and Procedures ,
Registered Investment Advisors ,
Regulation S-P ,
Securities and Exchange Commission (SEC) ,
Security Risk Assessments ,
Third-Party
The SEC recently instituted proceedings against a registered investment adviser and its founder, CEO and majority shareholder for allegedly making material misstatements and omissions regarding the amount of assets...more
9/14/2015
/ CEOs ,
Compliance ,
Conflicts of Interest ,
Enforcement Actions ,
False Advertising ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Material Misstatements ,
Omissions ,
Policies and Procedures ,
Sanctions ,
Securities and Exchange Commission (SEC)
The 2016 compliance dates for new rules included in the SEC’s money market fund reforms are fast approaching. Among other things, the reforms include changes to stress-testing requirements, disclosure requirements, net asset...more
The staff of the SEC’s Division of Investment Management said that it would not recommend enforcement action if a business development company (BDC) reorganizes into a master-feeder structure. The relief will also be...more
In a June 2015 Guidance Update, the staff of the Division of Investment Management clarified how the code of ethics reporting rules apply to investment advisers.
Current rules require certain advisory personnel who...more
Citing significant growth in the size and scope of exchange-traded products (ETPs), on June 12, 2015, the SEC focused its attention on ETPs, including exchange-traded funds (ETFs), non-1940 Act pooled investment vehicles, and...more
The SEC’s Division of Investment Management issued guidance highlighting the importance of cybersecurity and discussing measures that registered investment companies (“funds”) and registered investment advisers (“advisers”)...more
The SEC’s Office of Compliance Inspections and Examinations in a Risk Alert dated April 20, 2015, announced a program targeting investment companies that have never been examined for focused, risk-based compliance...more
The SEC sanctioned a registered investment adviser for breaching its fiduciary duty by failing to disclose to its clients a conflict of interest created by a portfolio manager’s outside business activity and personal...more
In This Issue:
- SEC Proposes Rule Requiring Hedging Disclosure
- SEC Reports the Result of its Cybersecurity Sweep of Broker-Dealers and Investment Advisers
- House Passes Bill to Ease Volcker Rule and Other...more
2/27/2015
/ Background Checks ,
Broker-Dealer ,
CFTC ,
Compliance ,
Cybersecurity ,
Data Protection ,
Dodd-Frank ,
Enforcement ,
Enforcement Actions ,
Equity Swaps ,
Financial Industry Regulatory Authority (FINRA) ,
Hedging ,
Investment Adviser ,
Investment Management ,
OCIE ,
Securities and Exchange Commission (SEC)
Yesterday, the Obama administration called on the Department of Labor to draft rules that, in effect, would require brokers who provide retirement advice to abide by a fiduciary standard. In a speech at an event hosted by...more
2/25/2015
/ Broker-Dealer ,
Brokers ,
Consumer Financial Protection Bureau (CFPB) ,
Department of Labor (DOL) ,
Dodd-Frank ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary Duty ,
Financial Adviser ,
Obama Administration ,
Proposed Regulation ,
Securities and Exchange Commission (SEC)
The National Exam Program of the SEC’s Office of Compliance Inspections and Examinations (OCIE) published its examination priorities for 2015 this week. (Last week, FINRA published its priorities, discussed here.) Many of the...more