January 22, 2018

Letter to ICI and SIFMA Lays out Concerns of Staff of SEC’s Division of Investment Management about Funds Investing Primarily in Cryptocurrencies

On January 18, 2018, the staff of the Securities and Exchange Commission ("SEC") Division of Investment Management (the "IM staff") issued a letter to the Investment Company Institute ("ICI") and the Securities Industry and Financial Markets Association ("SIFMA"). In this letter, the IM staff highlights significant investor protection issues presented by certain features of cryptocurrencies and cryptocurrency-related products that the IM staff believes must be addressed before funds investing in cryptoassets are offered to retail investors.1 In particular, the IM staff raised questions related to (1) valuation, (2) liquidity, (3) custody, (4) arbitrage and (5) market manipulation.  The IM staff also formally announced its position that until the questions raised by the IM staff can be addressed satisfactorily, it does not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products. In addition, the IM staff announced that it does not believe existing funds should file post-effective amendments under Rule 485(a) to register a fund that invests substantially in cryptocurrency or related products.

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January 18, 2018

SEC Division of Investment Management Issues FAQs on Investment Company Liquidity Risk Management Programs

The staff of the Division of Investment Management (Staff) of the U.S. Securities and Exchange Commission has issued guidance in the form of frequently asked questions (FAQs or guidance) related to the SEC's investment company liquidity risk management rule adopted in October 2016.  As discussed in our October 2016 memorandum, the SEC adopted new Rule 22e-4 (Rule) under the Investment Company Act of 1940, as amended,1 which requires each registered open-end management investment company, including mutual funds and exchange-traded funds (ETFs) but excluding money market funds, to adopt and implement a written liquidity risk management (LRM) program reasonably designed to assess and manage the fund's liquidity risk.

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December 27, 2017

Final Tax Reform Legislation

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.

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December 21, 2017

December 2017 Compliance Flash

Please click here to read the December 2017 edition of the Compliance Flash.  If you have any questions or comments, please contact your primary Investment Management attorney at Seward & Kissel LLP.    …

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December 11, 2017

SEC Modifies Approach to Form N-PORT Filing Requirements

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.

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November 29, 2017

DOL Announces Extension of Transition Period for Fiduciary Rule Exemptions

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.

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October 27, 2017

SEC Guidance on Non-GAAP Financial Measures

On October 17, 2017, the SEC Division of Corporation Finance issued new guidance on the use of non-GAAP financial measures.

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October 26, 2017


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.

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October 24, 2017

New Customer Due Diligence Requirements for Financial Institutions

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.

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October 24, 2017

October 2017 Compliance Flash

Please click here to read the October 2017 edition of Compliance Flash.

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