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.
September 5, 2017
In order to review and possibly revise the advice fiduciary rule, the Department of Labor (DOL) has proposed extending the existing transition period under the rule's exemptions until July 1, 2019.
September 4, 2017
Dalia Blass has been named Director of the Division of Investment Management. The Division oversees and regulates the multi-trillion dollar investment management industry. It is responsible for the regulation of investment companies, variable insurance products, and federally registered investment advisers.
August 25, 2017
As a reminder, an investment adviser registered or required to be registered with the SEC (each, an "Adviser") filing an initial Form ADV or an amendment to an existing Form ADV on or after October 1, 2017, will be required to use an amended Form ADV (the "Amended Form"), as further described in our Memorandum entitled "SEC Adopts Rules to Enhance Information Reported by Investment Advisers." In anticipation of the effective date, highlighted below are certain considerations presented by the Amended Form:
August 23, 2017
August 18, 2017
The SEC has created a landing page for “Cybersecurity” on its website. This webpage provides a general overview of the steps that the SEC is taking to address cyber threats. Importantly, the webpage provides resources concerning the applicable regulations that address cybersecurity practices for the following respective market participants: Investors Issuers / Public Companies Investment Advisers / Investment Companies Brokers and Dealers Self-Regulatory Organizations
August 10, 2017
On August 9, 2017, the Department of Labor submitted proposed amendments to the Best Interest Contract Exemption (BICE), Class Exemption for Principal Transactions and Prohibited Transaction Exemption 84-24, to delay applicability under the Fiduciary Rule from January 1, 2018 to July 1, 2019. In the meantime, we will continue to monitor the Department of Labor's (and the SEC’s) actions in this area, and will keep you informed of any changes to the Fiduciary Rule and Applicability Date. Please also refer to these prior posts regarding the Fiduciary Rule: The Department of Labor Delays the New Fiduciary Rule – 04/14/2017 DOL Issues Temporary Enforcement Policy on Fiduciary Rule – 03/14/17 DOL Adopts Proposal to Delay the Fiduciary Rule – 03/01/2017 Division of Investment Management Provides FAQs on Mutual Fund Fee Structures – 02/22/2017 Division of Investment Management Provides Interpretive Guidance on Section 22(d) Restrictions – 01/13/2017 Division of Investment Management Provides Guidance on “Mutual Fund Fee Structures” – 12/15/2016 The New Fiduciary Rule's Effect on Investment Managers – 05/27/2016
August 9, 2017
The SEC has recently completed its Cybersecurity Examination Initiative, aimed at better understanding how broker-dealers and advisers address the legal, regulatory, and compliance issues associated with cybersecurity. The examined firms were selected to provide perspectives from a cross-section of the financial services industry and to assess various firms’ vulnerability to cyber-attacks. The review was designed to discern basic distinctions among the level of preparedness of the examined firms. As a result of this review, OCIE highlights several factors that firms may consider to: (1) assess their supervisory, compliance and/or other risk management systems related to cybersecurity risks, and (2) make any changes, as may be appropriate, to address or strengthen such systems.
August 9, 2017
As cybersecurity remains one of the top compliance risks for financial firms, the SEC has released a Risk Alert on observations from OCIE’s Cybersecurity 2 Initiative. Following the initial initiative in 2014 that undertook to assess associated industry practices and legal and compliance issues, the more recent focus was on more validation and testing of procedures and controls surrounding cybersecurity preparedness.