December 27, 2017
On December 20, 2017, Congress passed tax reform legislation (the "Tax Act"). President Trump signed the Tax Act into law today. Most provisions take effect for tax years beginning after December 31, 2017. This Memorandum updates our previous analysis of the House and Senate Tax Acts, and focuses particularly on the issues that are most relevant to our Investment Management, Trusts & Estates and Family Office clients. Seward and Kissel's Trusts and Estates group has also reviewed the Tax Act and offered guidance on year-end planning. Section I of this Memorandum describes notable individual and corporate income tax changes. Section II describes certain provisions that affect investment managers. Section III describes certain provisions that affect investment funds.
December 21, 2017
December 11, 2017
On Friday, December 8, 2017, the Securities and Exchange Commission (“Commission”) announced the adoption of a temporary final rule that effectively delays the required submission of reports on Form N-PORT via EDGAR (the Electronic Data Gathering, Analysis, and Retrieval system) by nine months.
November 29, 2017
In order to allow time to consider public comments submitted pursuant to its Request for Information in July 2017, the Department of Labor (DOL) has extended the special Transition Period for the Best Interest Contract Exemption and the Principal Transactions Exemption, and of the applicability of certain amendments to Prohibited Transaction Exemption 84-24 until July 1, 2019.
October 27, 2017
October 26, 2017
SEC STAFF RELEASES GUIDANCE FOR U.S. MARKET PARTICIPANTS REGARDING U.S. REGULATED ACTIVITIES AND COMPLIANCE WITH MIFID II
The U.S. regulatory framework has presented challenges to market participants that must also structure their practices to comply with the implementation of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU ("MiFID II"), which takes effect on January 3, 2018. On October 26, 2017, the staff of the U.S. Securities and Exchange Commission (SEC) issued three related no-action letters that are designed to provide market participants with greater certainty regarding their U.S. regulated activities as they engage in efforts to comply with the MiFID II.
October 24, 2017
In May 2016, the Financial Crimes Enforcement Network (FinCEN), U.S. Department of the Treasury, issued final rules under the Bank Secrecy Act (BSA) to clarify and strengthen customer due diligence requirements. These new rules generally apply to financial institutions, including brokers or dealers in securities and mutual funds. The rules explicitly require certain due diligence efforts, as well as require the identification and verification of the identity of all beneficial owners of legal entity customers, subject to certain exceptions.
October 24, 2017
September 27, 2017
In a no-action letter dated September 22, 2017 (the "September 2017 Letter"), the Office of Chief Counsel of the SEC's Division of Investment Management (the "Staff") extended the temporary assurances it previously provided to a fund group (the "fund"), where in response to the fund's request in June 2016, the Staff stated that it would not recommend enforcement action against the fund if it continued to fulfill its regulatory requirements by using the audit services of a non-compliant auditing firm under the circumstances represented by the fund.
September 15, 2017
Risk Alert on the Most Frequent Advertising Rule Compliance Issues Identified in OCIE Examinations of Investment Advisers
The SEC has released a Risk Alert on those compliance issues that were most frequently identified in deficiency letters recently sent to SEC-registered investment advisers. The Risk Alert is also based on findings from the SEC’s 2016 Touting Initiative, which examined the adequacy of disclosures that advisers provided to their clients when touting awards, promoting ranking lists, and/or identifying professional designations (“accolades”) in their marketing materials, and which was launched in response to the regularity with which the Staff had encountered advisers that advertised these accolades without disclosing material facts about them.