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Category Archives: Investment Adviser Regulation

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Is it Time to Streamline Financial Regulation?

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

A March 13, 2017 presidential order requiring a comprehensive plan to reorganize the executive branch could be the first step toward streamlining the financial regulatory structure. The Executive Order requires the Director of the Office of Management and Budget to propose a plan within a year to reorganize government functions and eliminate unnecessary agencies, agency… Read More

SEC Staff Discusses Investment Company Reporting Modernization and Asset Management Industry Trends at SEC Speaks in 2017 Conference

Posted in Fund Regulation, Investment Adviser Regulation

On February 24, 2017, the U.S. Securities and Exchange Commission’s Division of Investment Management (the “Staff”) participated in a panel at the Practising Law Institute’s SEC Speaks in 2017 conference.  As part of the discussion, the Staff provided an update on the current initiatives relating to investment companies, as well as the Staff’s priorities for… Read More

SEC Staff Discusses Current Initiatives Related to Investment Advisers at SEC Speaks in 2017 Conference

Posted in Investment Adviser Regulation

On February 24, 2017, the U.S. Securities and Exchange Commission’s Division of Investment Management (the “Staff”) participated in a panel at the Practising Law Institute’s SEC Speaks in 2017 conference.  As part of the discussion, the Staff provided an update on the current initiatives relating to investment advisers, as well as the Staff’s priorities for… Read More

Personal Advice for Robo-Advisers: Beef Up Disclosure and Compliance

Posted in Investment Adviser Regulation

Robo-advisers, those automated bots that offer up personalized investment advice with little, if any, human contact, face increased regulatory scrutiny as they grow more popular. After monitoring and engaging them for several months, the SEC’s Division of Investment Management lent a personal touch in guidance published in February 2017, urging robo-advisers to improve risk disclosures and… Read More

SEC Grants Limited Relief from the Custody Rule for Advisers Relying on Clients’ Standing Letters of Instruction

Posted in Investment Adviser Regulation, SEC Enforcement

In a letter to the Investment Adviser Association (IAA), the Staff of the Division of Investment Management said that investment advisers acting pursuant to a standing letter of instruction or other similar asset transfer authorization (SLOA) established by a client with a qualified custodian would be deemed to have custody of client assets for purposes… Read More

One Step Forward, Two Steps Back?

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

Market participants who are not enamored by the current state of federal securities regulation may have been heartened by the new administration’s January 30, 2017 “two for one” order.  The order contemplated that, for each new rule issued by an executive department or agency, two regulations would need to be identified for elimination. The order… Read More

SEC 2017 Exam Priorities: Key Takeaways

Posted in Broker-Dealer Regulation, Investment Adviser Regulation

Far from the White House and the halls of Congress, compliance officers are preparing their compliance plans for 2017. On everyone’s mind: What will the Trump administration’s commitment to deregulate mean for compliance priorities? The short answer is “not much,” at least for the near-future. To predict what’s in store for the immediate future, compliance… Read More

The Future of Investment Management Regulation: What to Expect in 2017

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

In this fast-changing regulatory environment, the long-term consequences – both intended and unintended – of the recent White House remain uncertain, but looking into our crystal ball, we certain trends emerging.  These trends may lead to long-term shifts in how the Securities and Exchange Commission approaches regulation and enforcement, but, at least in the short-term,… Read More

OCIE Identifies Top Five Adviser Compliance Issues

Posted in Investment Adviser Regulation

In a new Risk Alert, OCIE’s National Exam Program provided investment advisers with insight into the five compliance topics most frequently identified in its exam deficiency letters.  Registered investment advisers should review their compliance policies and procedures to ensure they have adequately addressed these issues. OCIE also provided examples of the types of deficiencies they… Read More

President Trump Directs DOL to Review the Fiduciary Rule and Consider Modifications or Revocation

Posted in Broker-Dealer Regulation, Investment Adviser Regulation

On February 3, 2017, President Trump directed the Department of Labor (“DOL”) to review the fiduciary rule adopted in April 2016 (the “Fiduciary Duty Rule”) and consider whether the Fiduciary Duty Rule should be modified or rescinded.  The President’s order instructed the DOL to consider whether the Fiduciary Duty Rule would: Harm investors’ access to… Read More

Trump Signs Executive Orders on DOL Fiduciary Rule and Dodd-Frank

Posted in Broker-Dealer Regulation, Investment Adviser Regulation

On February 3, 2017, President Donald Trump signed an executive order to delay the implementation of the Department of Labor’s Fiduciary Rule.  President Trump also signed an executive order to roll back certain parts of the Dodd-Frank Act.  We will continue to monitor news relating to these executive orders and report developments on this blog…. Read More

Unintended Consequences of Financial Services Reform

Posted in Broker-Dealer Regulation, Events, Investment Adviser Regulation

Thursday, February 16, 2017 4:15 p.m. – 7:30 p.m. Thomson Reuters 3 Times Square New York, New York 10036 The Center for Financial Services at the College of Business and Economics at Lehigh University will present a panel discussion of the unintended consequences of financial reform in New York City on February 16, 2017. In… Read More

Enforcement Focus on Advisers’ “Cherry-Picking” Continues

Posted in Investment Adviser Regulation, SEC Enforcement

The SEC banned the managing member and chief compliance officer of a registered investment adviser from the securities industry for illegal “cherry-picking” investments among the adviser’s managed accounts.  The SEC staff uncovered the trades through data analysis used to detect suspicious trading patterns. The SEC filed a complaint in federal district court in the District… Read More

Uncertain Seas: European Financial and Regulatory Developments into 2017

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

“There are greater storms in politics than you will ever find at sea. Piracy, broadsides, blood on the decks. You will find them all in politics.”  —David Lloyd George, British Prime Minister, 1916-1922 “The greater the difficulty the more glory in surmounting it. Skillful pilots gain their reputation from storms and tempests” —Epictetus Lloyd George… Read More

OCIE 2017 Exam Priorities: Focus on Retail, Elderly and Retirement Investors; Market Risks

Posted in Broker-Dealer Regulation, Investment Adviser Regulation

The SEC’s National Examination Program (NEA) of the Office of Compliance Inspections and Examinations (OCIE) announced that its examination priorities in 2017 will focus on three general areas: retail investors, risks specific to elderly investors and retirement investing, and assessing market-wide risks. Read our client alert.

Big Regulatory Changes in Store for Funds and Advisers? No One Knows for Certain, but Here’s Our Best Guess

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

While no one knows for sure what the future holds for investment management regulation, the tea leaves indicate that we may expect a slowdown on new regulations, some pullback on parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), and an abundance of uncertainty. Here, we provide some observations for investment companies,… Read More

CFTC Approves Final Rule Amendments to CPO Financial Report Regulations

Posted in Fund Regulation, Investment Adviser Regulation

On November 21, 2016, the U.S. Commodity Futures Trading Commission (CFTC) approved final rule amendments to its regulations that allow commodity pool operators (CPOs) to use certain additional alternative generally accepted accounting principles, practices or standards in preparing financial statements for non-U.S. commodity pools and that exempt commodity pools from the audit requirement for Annual… Read More

U.S. District Court: Fund Trustees Cannot Rely on Attorney-Client Privilege in Section 36(b) Case

Posted in Fund Regulation, Investment Adviser Regulation

A federal district court has ordered mutual fund trustees to produce privileged documents to a plaintiff who sued an investment adviser accused of charging excessive investment advisory fees. The November 21, 2016 order may pave the way for plaintiffs in “excessive fee” cases to brush aside the attorney-client privilege and learn what independent trustees discussed… Read More

The Future of Financial Regulation

Posted in Events, Fund Regulation, Investment Adviser Regulation

Wednesday, November 16, 2016 10:00 a.m. – 3:00 p.m. EST The Smith Suite at the Ronald Reagan Building 1300 Pennsylvania Avenue NW Washington, D.C. 20004 Join the CFP, CFA Institute and Morrison & Foerster for this half-day conference that will examine the potential post-election changes to the financial regulatory system, including changes to the Dodd-Frank… Read More

Alphabet Soup?

Posted in Broker-Dealer Regulation, Fund Regulation, Investment Adviser Regulation

Several years have now passed since the financial crisis and the onslaught of regulations intended to prevent a future crisis. Regulatory reform has assuredly resulted in significant changes to our financial services sector. Regulatory reform also brought with it an alphabet soup of acronyms and terms with which we all have had to become familiar…. Read More

House Bill Would Ease Regulatory Restrictions to Private Fund Advisers

Posted in Fund Regulation, Investment Adviser Regulation

On September 9, 2016, the U.S. House of Representatives approved a bill that would amend the Investment Advisers Act of 1940 to modernize certain disclosure requirements and lessen regulatory burdens on private fund advisers.  The proposed amendments would not apply to advisory services provided to registered investment companies. H.R. 5424, the Investment Advisers Modernization Act… Read More

OCIE Announces Adviser Supervision Practices Initiative

Posted in Investment Adviser Regulation

On September 12, 2016, OCIE published a National Exam Program Risk Alert announcing an initiative to examine the supervision practices of registered investment advisers (“RIAs”) that employ individuals with a history of disciplinary events in the financial services sector (the “Supervision Initiative”).  OCIE intends to assess RIAs’ business and compliance practices, with a particular focus… Read More