Unique Views into the Regulation of Asset Management
The SEC’s Office of Compliance Inspections and Examinations (OCIE) issued a risk alert to explain the focus of its upcoming examinations of broker-dealers when gauging their compliance with Regulation Best Interest (Reg BI). In particular, OCIE will focus on reviewing broker-dealers’ policies and procedures relating to Reg BI.
OCIE’s Reg BI examinations are scheduled to …
In recognition of the disruptions caused by COVID-19, the Division of Investment Management (the “Division”) of the Securities and Exchange Commission (the “SEC”) will require interested persons to submit written hearing requests for filed exemptive applications by sending an e-mail to the SEC’s Secretary at Secretarys-Office@sec.gov rather than sending a request to the SEC by physical mail. The Division will reflect this e-mail requirement in forthcoming notices. In addition, the Division is offering applicants the option to provide an e-mail address to be included in the SEC’s notice of their application so that interested persons may serve applicants by e-mail (instead of by mail or personally).…
On March 12, 2020, the U.S. Securities and Exchange Commission announced a settlement with an exempt reporting adviser and its two founders for failure to disclose several conflicts of interest and failure to take measures required by the private fund’s offering documents.
The SEC is examining exempt reporting advisers, and although not subject to all…
On April 7, 2020, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) published two risk alerts intended to provide market participants with advance information regarding (1) upcoming inspections for broker-dealer compliance with Regulation Best Interest (“Regulation BI”) and (2) upcoming inspections for broker-dealer and investment adviser compliance with Form CRS. The compliance date for both Regulation BI and Form CRS is June 30, 2020.
You can find more details in our client alert.…
On March 25, 2020, the Securities and Exchange Commission (“SEC”) published new relief that supersedes its March 13, 2020 order for investment advisers filing and delivery obligations of Form ADV and Form PF. We have updated our original post to reflect the relief provided in the SEC’s new March 25 order. This new order extends…
On March 26, 2020, the Securities and Exchange Commission (“SEC”), announced two agency actions providing additional relief to market participants in response to the impacts of COVID-19 on the markets. First, the SEC adopted an interim final rule providing relief related to (a) market participants needing to gain access to make filings on the EDGAR system and (b) certain company filing obligations under Regulation A and Regulation Crowdfunding. Second, the SEC published a temporary conditional exemptive order providing relief from certain filing requirements for municipal advisors.
This blog post summarizes the SEC relief and conditions to the relief.…
In the midst of the COVID-19 pandemic, the financial markets have experienced significant volatility. During the course of this volatility, exchanges have halted trading multiple times after declines in trading trigged circuit breakers. In addition, trading floors are transitioning to electronic trading in efforts to prevent the transmission of COVID-19 on physical trading floors. With the recent turmoil, this post provides a high-level summary of the various types of circuit breakers and what can be expected.…
On March 25, 2020, the Securities and Exchange Commission (“SEC”) issued an order granting temporary relief for filing and delivery obligations of Form ADV and Form PF for investment advisers whose operations may be affected by the coronavirus. This relief supersedes the SEC’s previous order from March 13. The March 25 order extends the time of the relief to June 30, 2020, and eliminates the requirement for the adviser to provide the SEC and clients with a description of the reasons why the adviser is relying on the order and an estimated date by which the required filing will occur.
The relief applies to both registered investment advisers and exempt reporting advisers. In providing the relief, the SEC explained that it is necessary “[i]n light of our current understanding of the nationwide scope of COVID-19’s disruptions to businesses and everyday activities, and the uncertainty as to the duration of these disruptions.”…
On January 27, 2020, the Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) released observations on cybersecurity and resiliency (the “Observations”). In them, OCIE presented several key cybersecurity issues that industry participants should seek to address such as the construction and implementation of a comprehensive cybersecurity program, the prevention of unauthorized access to systems, the theft of information, responding to cyber incidents, and vendor management. In doing so, OCIE highlighted elements of successful cybersecurity efforts.
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On June 5, 2019, the U.S. Securities and Exchange Commission (“SEC”) adopted a package of rules and interpretations relating to the standards of conduct for broker-dealers and investment advisers, including a new “best interest” rule for broker-dealers. The package was adopted by a 3-1 vote, with Commissioner Robert J. Jackson Jr. as the lone dissenter. Chairman Jay Clayton, who supported the package, stated that the SEC was not adopting a uniform fiduciary rule for broker-dealers and investment advisers. Instead, Chairman Clayton explained that “Regulation Best Interest incorporates fiduciary principles, but is appropriately tailored to the broker-dealer relationship model and will preserve retail investor access and choice.” Chairman Clayton, as well as the SEC’s press release, emphasized that Regulation Best Interest cannot be satisfied by disclosure alone, but rather through compliance with each of the rule’s four substantive obligations.
The actions taken on June 5 include the following:
