More than just the facts, Flash Reports provide context for what’s currently happening in the industry and translate that into what it means for your business.
On August 23, 2023, a divided SEC voted to adopt enhanced regulations of private fund advisers. These included two rules that all investment advisers managing private funds must follow: the Preferential Treatment Rule and the Restricted Activities Rule.
Read MoreOn April 23, 2024, the White House announced that the Department of Labor (“DOL”) has finalized its Retirement Security Rule, also known as the “Fiduciary Rule.” The new rule extends the current definition of “investment advice fiduciary” under ERISA to include advisers when they “give investment advice for a fee to retirement plan participants, individual retirement account owners and others.” The rule and related exemptions will be effective on September 23, 2024, with a phase-in period for many of the exemptions and reporting requirements of one year until September of 2025.
On April 17th, 2024, the Division of Examinations (“EXAMS”) published a risk alert to inform investment advisers, investors, and other market participants about the examiner’s observations on the Marketing Rule. This risk alert highlights the Division’s focus on advisers’ compliance with the marketing rule and their completion of the marketing rule items contained in Form ADV as well as Advisers Act Rule 206(4)-7 (the “Compliance Rule”), Advisers Act Rule 204-2 (the “Books and Records Rule), and the Marketing Rule’s “General Prohibitions”.
The Securities and Exchange Commission (SEC) has fined several companies in recent months for off-channel communications and record-keeping. At the recent SEC Speaks conference, Sanjay Wadhwa, deputy director of the Division of Enforcement, said the SEC considers several factors in determining the fine amount, including size of the firm, breadth and depth of the violations, whether a firm self-reported, level of cooperation, and more.
In March, the U.S. Department of Treasury has released its newest report, Managing Artificial Intelligence- Specific Cybersecurity Risks in the Financial Services Sector. The report, which was mandated by Executive Order 14110, Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, outlines the current state of AI as it relates to the financial industry, as well as best practices for managing and utilizing AI, largely in relation to growing fraud and cybersecurity threats associated with AI.
On March 29, 2024, the Securities and Exchange Commission’s Division of Examinations (EXAMS) published a Risk Alert on changes to the securities transaction settlement cycle. The Risk Alert noted that, as of May 28, 2024, “the standard settlement cycle for most transactions in US securities will shorten from two business days (‘T+2’) to one business day (‘T+1’).”
The SEC announced on Monday that it settled charges against two investment advisers, Delphia (USA) Inc. and Global Predictions Inc., for making false and misleading statements about their purported use of artificial intelligence (AI), according to a SEC press release. This is the first time the SEC has fined investment advisers for false and misleading statements about their use of AI.