August 31, 2016

Investment Adviser Settles Charges of Failing to Disclose Key Terms in Application for Exemptive Relief

The Securities and Exchange Commission (“SEC”) recently announced its settlement of charges against a registered investment adviser (the “Adviser”) for failing to disclose material terms in, among other documents filed with the SEC, an application for exemptive relief.  The SEC determined that the Adviser had violated Section 34(b) of the Investment Company Act of 1940, as amended (the “1940 Act”), by not disclosing a side agreement with a subadviser, the terms of which were inconsistent with concerns raised by the SEC’s Division of Investment Management (the “Staff”) in its review of the application.

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August 25, 2016

FINRA Seeks Comment on Proposed Amendments to Its Gifts, Gratuities and Non-Cash Compensation Rules

FINRA has issued Regulatory Notice 16-29 (the “Notice”) seeking comment on proposed amendments to FINRA Rule 3220 (Influencing or Rewarding Employees of Others), as well as the adoption of proposed FINRA Rule 3221 (Restrictions on Non-Cash Compensation) and FINRA Rule 3222 (Business Entertainment). Comments are due by September 23, 2016. The proposed rule amendments are the result of FINRA’s retrospective review, completed in 2014, of its existing rules to assess their effectiveness and efficiency. The Notice states that FINRA’s published report on its review concluded that the rules “could benefit from some updating to better align the investor protection benefits and the economic impacts.”

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