July 22, 2024, was the deadline for the SEC to petition the Fifth U.S. Circuit Court of Appeals to review its landmark decision that vacated the Private Fund Rules, and the SEC let this deadline pass. It appears the SEC will not attempt to relitigate the decision.
On June 5th, the Fifth U.S. Circuit Court of Appeals vacated the Private Fund Reform Rules, saying that the SEC exceeded its statutory authority in adopting them on August 23, 2023. The Private Fund Reform Rules were adopted by a narrow 3-2 vote with strong dissent from the conservative commissioners. This expansive set of rules sought to enhance regulation, not just of registered private fund advisers, but of all private fund managers.
On May 13th, FinCEN and the SEC jointly released a proposed rule to apply CIP obligations on RIAs and ERAs. This new proposal comes on the heels of FinCEN’s February 13th proposal of an AML rule to designate RIAs and ERAs as “financial institutions” under the Bank Secrecy Act and apply AML/CFT program, suspicious activity reporting and record keeping requirements.
On May 28, 2024, the settlement cycle for most transactions in US securities will shorten from two business days (‘T+2’) to one business day (‘T+1’). May 28, 2024, is also the compliance date for the new requirements of the industry when processing institutional trades and the new recordkeeping requirements of registered investment advisers (“RIAs”).
On 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.