December 28, 2010

SEC Extends Brochure Supplement Compliance Date

The SEC has provided a four month extension to the compliance dates by which certain investment advisers must provide clients with brochure supplements, a new disclosure document containing information about the advisory personnel on whom clients rely for investment advice.

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December 28, 2010

SEC Extends Temporary Adviser Principal Trading Rule

The SEC extended a temporary rule—Rule 206(3)-3T of the Investment Advisers Act of 1940—that allows advisers, who are registered as broker-dealers, to engage in principal trading subject to certain notice and consent requirements. Without the two-year extension, the rule would expire on Dec. 31, 2010. The extension will allow the SEC to take into account recent legislative developments, as well as its own experiences with the operation of the rule to date. Publication is expected in the Federal Register on Dec. 30, 2010.

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December 27, 2010

Financial Advisory Trade Groups Are Against FINRA’s Proposal to Regulate Investment Advisers

The CFP Board, the Financial Planning Association and the National Association of Personal Financial Advisors (the “groups”) are urging the SEC to not delegate the oversight of independent advisers to FINRA. The SEC is in the process of analyzing this issue as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).

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December 27, 2010

RR Donnelley First to File Live XBRL for Mutual Fund

R.R. Donnelley & Sons Company announced that it has made its first XBRL filing for a mutual fund client. The documents were submitted under the “Interactive Data for Mutual Fund Risk/Return Summary” rule (Release No. 33-9006). The filing, on December 17, 2010, was for Russell Investments, a Seattle-based adviser to a number of mutual funds. It included Form 485BPOS with XBRL exhibit 101.

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December 23, 2010

Texas Preparing for a Greater Role in Regulating Investment Advisers

Texas Securities Commissioner Denise Voigt Crawford reviewed the Texas State Securities Board’s preparation for the anticipated rise in the number of Texas-registered investment advisers. Currently, the Texas Commission has 25 positions in inspections and compliance.  It is structured so that everyone plays a role in administering, inspecting and, if need be, litigating in the investment adviser area. Another 12 people are involved in registration.  Additionally, it expects to add 10 new positions.

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December 21, 2010

San Francisco Hedge Fund Adviser Charged with Fraud

The SEC charged two investment adviser firms, American Pegasus LDG, LLC (APLDG) and American Pegasus Investment Management, Inc. (APIM), located in San Francisco and various former officers with defrauding investors in a hedge fund that invested in subprime automobile loans.  The SEC found that Benjamin P. Chui, the firm’s chief executive officer, and Triffany Mok, a portfolio manager and Charles E. Hall, Jr., the firm’s general counsel, engaged in improper self-dealing, misused client assets, and failed to disclose conflicts of interest.

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December 20, 2010

Investment Adviser Charged with Securities Fraud and Other Violations

The SEC brought fraud charges against Alfred Clay Ludlum III of Wilmington, Delaware and his wholly-controlled companies, Printz Capital Management, LLC, a registered investment adviser, Printz Financial Group, Inc., and PCM Global Holdings, LLC (the “Printz Entities”).

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December 20, 2010

Permanent Rule Proposed to Require Municipal Advisers to Register with the SEC

The SEC proposed a rule creating a new process by which municipal advisers must register with the SEC.  The proposed rule is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.  It will replace a temporary rule adopted by the SEC, which was adopted in September. The SEC adopted the earlier temporary rule on an interim basis because the Dodd-Frank Act required that these advisers register by October 1, 2010

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December 15, 2010

SEC Proposes Requirements for Swaps Exempt from Mandatory Clearing

The SEC proposed rules governing the end-users of security-based swaps when they engage in transaction that are not subject to mandatory clearing.

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December 15, 2010

SEC Proposes Review of Process for Mandatory Clearing of Swaps

The SEC proposed rules, which are mandated by the Dodd-Frank Act, that will, if adopted, set out the way in which clearing agencies provide information to the SEC about security-based swaps that the clearing agencies plan to accept for clearing. This information is designed to aid the SEC in determining whether such security-based swaps are, in fact, required to be cleared.

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