Mutual Fund and Institutional Issues

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OCIE Announces Most Frequent Advertising Rule Risks Identified in Examinations

OCIE Announces Most Frequent Advertising Rule Risks Identified in Examinations WHAT HAPPENED? On September 14, 2017, the Office of Compliance Inspections and Examinations (“OCIE”) announced the most frequent compliance issues with the Advertising Rule that were identified in their recent deficiency letters and examinations.  The Advertising Rule states that [...]

Shortened Settlement Cycle for Securities Transactions

Shortened Settlement Cycle for Securities Transactions WHAT HAPPENED? On September 5, 2017, the securities industry changed the business day standard settlement cycle of securities transactions covered by the T+3 settlement cycle to a T+2 settlement cycle.  The amended rule began covering securities that were traded on September 5, 2017, [...]

SEC Charges Investment Adviser with Defrauding Clients and Prospective Clients

SEC Charges Investment Adviser with Defrauding Clients and Prospective Clients WHAT HAPPENED? On August 31, 2017, the SEC charged an investment adviser and its principal (collectively, the “Defendant”) with misleading clients and prospective clients about the performance track record of an investment strategy they offered.  The SEC explained that the [...]

Action Advisers Should Take Prior to January 30, 2018, to Comply with the Custody Rule

Action Advisers Should Take Prior to January 30, 2018, to Comply with the Custody Rule THE CUSTODY RULE As summarized in a previous Flash, the SEC published a ‘no-action’ letter in February 2017, stating that custody requirements can be triggered under certain circumstances when an adviser participates in first-party and [...]

Preparing Compliant Advertising (Including GIPS)

Preparing Compliant Advertising (Including GIPS) THE AD RULE Advertising is often a key focus of the SEC’s examinations, making it imperative for investment advisers to remain up to date on the requirements of marketing-related regulations.  All written communication provided to more than one person and any notice that solicits investment advisory [...]

SEC Conducts Surprise Examinations

SEC Conducts Surprise Examinations WHAT HAPPENED? The SEC’s Boston Regional Office has confirmed that it has randomly visited close to 20 registered investment advisers in the region to conduct examinations without providing any prior notice.  During these examinations, the SEC staff has met with the firm’s Chief Compliance Officer, and [...]

DOL Provides Conflict of Interest FAQs Around Fiduciary Rule

DOL Provides Conflict of Interest FAQs Around Fiduciary Rule WHAT HAPPENED? On August 3, 2017, the DOL released a conflict of interest FAQs to provide additional clarification around the Fiduciary Rule. In the FAQ, the DOL provides guidance regarding: Fiduciary status disclosures that must be provided by ERISA pension plan service providers [...]

Dual Registrant Fails to Disclose Conflict of Interest from Revenue Sharing

Dual Registrant Fails to Disclose Conflict of Interest from Revenue Sharing WHAT HAPPENED? On July 19, 2017, the SEC charged a dually-registered investment adviser and broker dealer (“Respondent”) for failing to disclose compensation received from a third-party broker-dealer (“Broker”). Starting in 2002, Respondent waived transaction fees it and Broker would otherwise charge [...]

Upcoming Amendments to Form ADV

Upcoming Amendments to Form ADV WHAT HAPPENED? The new ADV reporting requirements go into effect October 1, 2017. Under the revised Form ADV, advisers will: require investment advisers to disclose additional information about their separately management account (“SMA”) business; require investment advisers to report specific information on general business operations, [...]

SEC Updates Form ADV FAQs

SEC Updates Form ADV FAQs WHAT HAPPENED? On June 12, 2017, the SEC released new Form ADV FAQs to provide guidance on recent amendments made to the form. The additions to the FAQs are related to Items 1.I, 1.J, 5.D, 5.K, 7.B and Schedule R. The SEC also provided an update [...]