Shocking Recension and Amendment of the Proxy Adviser Rule Threatens Shareholder Democracy I. Introduction In November 2021, the U.S. Securities and Exchange Commission’s (the “SEC” or “Commission”) proposed recensions and amendments to the proxy adviser rule under the Investment Advisers Act of 1940. The SEC’s proposed rules have ignited debates [...]
ADVISER CHARGED WITH FAILING TO DISCLOSE FEES AND EXPENSES: Results in nearly $10 million in penalties and reimbursements WHAT HAPPENED? On December 20th, a private fund adviser, Global Infrastructure Management, LLC, was charged by the SEC for fee and expense disclosure failures. The SEC’s investigation revealed that Global provided investors with [...]
SEC Exam Trends The SEC’s Division of Examinations has conducted a series of exams, coined as the Retail Investment Company Initiatives (RIC), which focused on mutual funds and exchange-traded funds (ETFs). This initiative concentrated on advisers that fell into the following six categories: (1) index funds that track custom-built indexes; (2) smaller [...]
SEC Proposes Reforms for Private Funds WHAT HAPPENED? On February 9, 2022, the United States Securities and Exchange Commission voted to propose new rules and amendments to enhance the regulation of private fund advisers and protect investors in private funds by increasing transparency. The proposed rules would require private fund advisers to [...]
SEC Continues Focus on Private Fund Advisers WHAT HAPPENED? In the past five years, private fund assets have increased by 70%. As private fund advisers continue to play a larger role in the financial markets, the Division of Examinations (“EXAMS”) published a risk alert of their observations. The risk alert is [...]
Compliance Date Approaching for Fund of Funds Arrangements Under The Investment Company Act of 1940, as Amended WHAT HAPPENED? Last year the U.S. Securities and Exchange Commission adopted a new rule and related amendments regarding fund of funds arrangements in rule 12d1-4 (see our prior coverage here). The regulatory framework provides flexibility [...]
Phasing Out LIBOR WHAT HAPPENED? First, what is LIBOR? The London Interbank Offered Rate ("LIBOR") is the average interest rate by which major global banks borrow from one another. LIBOR rates that are not based on the U.S. Dollar will be discontinued on December 31, 2021, while those linked to the [...]
The New Marketing Rule: RETIRING NO-ACTION LETTERS WHAT HAPPENED? When the SEC adopted the Marketing Rule, it rescinded the Cash Solicitation Rule as of the Marketing Rule’s compliance date and stated that the staff no-action letters that address that rule are to be nullified. With the SEC adoption of the new Marketing [...]
SEC Focuses on Advisory Fee Calculation: What You Need to Know WHAT HAPPENED? During recent regulatory exams, the SEC detected several issues with investment advisers’ fee calculations. The SEC wants to see that firms have: Adopted, and are following, policies and procedures that adequately address fair and accurate charging of fees; [...]
Advisers to Private Funds: Going from Exemption Reporting Adviser (ERA) to Fully Registered Adviser. Fairview partners with firms to get registered and provide on-going compliance support. WHAT IS GOING ON? Many exempt reporting advisers (ERAs) are unaware of their current compliance responsibilities as well as what triggers full registration, the timing for [...]