02 June 2021
Background This article follows the first in our series, The Definition of an Advertisement, where we summarized the amended Marketing Rule’s definitions of an advertisement; specifically the elements covered under Prong 1 and Prong 2 of the definition. Part Two of our series will focus on the General Prohibitions outlined in the new Marketing RuleRead More »
06 April 2021
We finally have the 2021 Examination Priorities (“Priorities”) from the SEC, albeit later than previous years. You can read the release here. The Priorities for 2021 are strikingly similar to those of previous years, as noted below: Retail Investors, Including Seniors and Individuals Saving for Retirement Information Security and Operational Resiliency Financial Technology (FINTECH) andRead More »
01 March 2021
Background The SEC proposed and adopted the new Marketing Rule, (the “Rule”) which will eventually replace the current Advertising Rule (Rule 206(4)-1, originally adopted in 1961) and the Solicitation Rule (Rule 206(4)-3, originally adopted in 1979). The Rule is a complete rewrite of the existing Advertising and Solicitation Rules, implementing a “principles based” approach toRead More »
26 January 2021
On December 16, 2020 the SEC released a risk alert addressing observations from examinations for adviser’s compliance with Rule 13h-1, also known as the Large Trader Rule.. This article will cover investment advisers’ obligations under Rule 13h-1 and helpful guidance to make it easier. What is Rule 13h-1? Rule 13h-1 of the Securities and ExchangeRead More »
05 January 2021
Don’t miss a compliance deadline this year! We have put together a calendar to help you keep track of regulatory filing deadlines for 2021. You might want to bookmark this one and also make sure you are on our deadline reminder list! 2021 SEC Regulatory Deadlines for Investment Advisers The filing deadlines are listedRead More »
04 January 2021
The SEC Risk Alerts keep coming, this time with exam observations regarding investment advisors’ Compliance Programs. According to OCIE, the most common exam deficiencies arise from issues with Rule 206-4(7), known as “the Compliance Rule.” Rule 206(4)-7 requires investment advisors to have policies and procedures reasonably designed to prevent, detect, and correct violations of theRead More »
17 December 2020
Effective February 1, 2021, New York state will require Investment Advisor Representatives (“IARs”) to register with the state via the CRS/IARD system. You can read the updated NY regulation here. Historically, New York has been one of the few states to not require IARs of federally registered investment advisors to register at the state level,Read More »
04 December 2020
The SEC has blessed us once again with another Risk Alert. This time, they are providing us with a summary of their findings from a series of focused exams of advisors with branch offices. We intentionally left out the term “branch office” in the title of this article, because many of their findings are relevantRead More »
30 October 2020
On September 15th, the SEC issued a Risk Alert to address a method of cyber-attack that is more sophisticated yet increasingly accessible to attackers: “credential stuffing.” We’re getting close to Thanksgiving, but that’s not the direction the SEC is going. This method of cyber-attack involves using compromised client login credentials to gain unauthorized access toRead More »
24 September 2020
In August of this year, the SEC released an amendment to the “accredited investor” definition. What is an Accredited Investor? Certain qualifications must be met in order to invest in private placements or private funds. One qualification is being an “accredited investor.” An accredited investor must have an annual income of $200,000 (if single) orRead More »
01 September 2020
On August 12th the SEC issued a Risk Alert outlining observations from exams and risks in light of the COVID-19 work from home environment. The Commission outlined six (6) areas of concern for firms to review and adjust policies and procedures as necessary, focusing on operational, technological, commercial and other challenges identified. Below we highlightRead More »
04 August 2020
On July 10th the SEC issued a risk alert focusing on ransomware and the importance of generating awareness within advisory firms of current threats. The SEC is encouraging registrants to monitor alerts provided by the Department of Homeland Security Cybersecurity and Infrastructure Security Agency (CISA) and share the information gathered with third party service providersRead More »
19 July 2020
On July 10th, the SEC released a proposal to amend reporting requirements of Form 13F to update the reporting threshold which has not been adjusted in over 40 years. What is 13F? Section 13F of the Securities and Exchange Act requires registered investment advisers to file a report with the Commission, via the Edgar system,Read More »
06 July 2020
The SEC issued a risk alert on June 23rd that provides a summary of the results the staff discovered when conducting exams of investment advisors that manage private funds. If you are an advisor to private funds (all types including private equity) or plan to be, we highly recommend you read through this article toRead More »
02 June 2020
We have settled into work from home life and found a (somewhat) new normal of work during the pandemic. When the dust settles, we expect the SEC to focus on areas such as business continuity and supervision of employees during the pandemic. We also wouldn’t be surprised if the SEC conducts sweep exams of pandemicRead More »
08 May 2020
SEC Risk Alert: Form CRS On April 7, 2020, the Office of Compliance Inspections and Examinations (“OCIE”) issued a risk alert to let advisors and broker-dealers know that, regardless of COVID-19, it’s business as usual at the SEC and firms must continue to meet their filing and delivery obligations of Form CRS. OCIE will mostRead More »
23 March 2020
It didn’t take long for advisors to start receiving requests from underlying managers, investors and even the SEC on how they were responding to the pandemic. Areas being addressed, include, but are not limited to: A copy of your firm’s Business Continuity Plan (“BCP”) and any additional policies to how your firm responded to theRead More »
06 March 2020
Review of Part 1: The Foundation In the first article of this series, we discussed the foundational information you need to know to ensure your marketing and advertising materials are in compliance with the SEC’s rules and regulations. We helped you clearly understand: the SEC’s definition of an “advertisement.” What is considered an advertisement, whatRead More »
29 January 2020
I can’t think of a better way to start off the year than by reading the SEC’s Exam Priorities for 2020. Okay, I’m being a bit facetious. But in all honesty, I do look forward to this publication. It is a great compliance tool because it puts a spotlight on SEC focus areas and allowsRead More »
03 January 2020
Have you heard? There is a new form in town. It goes by many names…it is referred to as the Client Relationship Form, Form CRS, or even ADV Part 3. The intent of this new form is to provide your Retail Investors with the information needed for them to make an educated decision about whetherRead More »
19 December 2019
The purpose of this compliance calendar is to help you keep track of regulatory filing deadlines for 2020. To receive reminders, make sure you join our mailing list! 2020 SEC Regulatory Deadlines for Investment Advisers The filing deadlines are listed below in chronological order, with additional details of RIA form and filing obligations toward the end.Read More »
27 November 2019
Review of Part 1: The Foundation In the first article of this series, we discussed the foundational information you need to know to ensure your marketing and advertising materials are in compliance with the SEC’s rules and regulations. We helped you clearly understand: the SEC’s definition of an “advertisement.” What is considered an advertisement, whatRead More »
27 November 2019
After years of research, OCIE exam findings, and roundtable discussions, the SEC has issued guidance on proxy voting in the form of a Question and Response (“Q&R”). You can find the Q&R guidance here. The responsibilities of proxy voting can be an administrative burden for investment advisors, which is why many have chosen a third-partyRead More »
25 October 2019
Review of Part 1: The Foundation In the first article of this series, we discussed the foundational information you need to know to ensure your marketing and advertising materials are in compliance with the SEC’s rules and regulations. We helped you clearly understand: the SEC’s definition of an “advertisement.” What is considered an advertisement, whatRead More »
28 August 2019
As part of the SEC’s focus on protecting retail investors, in 2017, they examined over 50 RIAs to assess the supervisory practices of advisers who (at the time) currently or previously employed personnel with a history of disciplinary events (the “Supervision Initiative”). Nearly all of the advisers examined received deficiency letters. The Risk Alert recentlyRead More »
22 July 2019
Once again, the SEC has provided insight into exam deficiencies. This time, it’s regarding Reg S-P. Reg S-P requires, among other things, that registered investment advisers: provide customers with a copy of the Firm’s Privacy Notice initially and annually, if there are changes; provide customers with an option to opt out of personal informationRead More »
02 July 2019
As a reminder, a “Risk Alert” is the SEC’s way of giving you a heads up about patterns of deficiencies during recent examinations. They can help you stay on top of your game. On May 23, 2019, the SEC issued a risk alert on utilizing third parties to host and store records. Using a thirdRead More »
08 May 2019
We wanted to share with you the common themes we’ve observed among the recent industry conferences we attended. Let us know if we can help you with any of these topics. Senior Investors It was discussed that the SEC views senior investors as the most vulnerable investor group and considers it the investment advisers’Read More »
29 April 2019
The topic of Advertising is one of the most challenging areas for CCOs. The challenge begins with the SEC’s definition of “advertisement.” It’s confusing and outdated. The way that the rule is written makes you feel like you have to run through a flow chart of questions every time you write something, meet with someone,Read More »
03 April 2019
In all of my experience, working with CCOs as a compliance consultant, the one common sentiment they share is overwhelm. Especially those who wear multiple hats (which is most of the CCOs I work with). If that’s you, you probably ask yourself, “How do I fit all of this in?!” In first quarter,Read More »
01 March 2019
Did you see the SEC’s Risk Alert on Electronic Messaging? We did! And let us start by saying, this Risk Alert was actually really helpful! A lot of times, the SEC issues Risk Alerts that tell you the issues they’re seeing in recent SEC examinations and remind you of your compliance obligations, but theyRead More »
21 February 2019
Each year, the SEC publishes their exam priorities. This provides advisers with transparency in OCIE’s examination program and highlights areas that the SEC believes are of heightened risk. Unlike last year (when OCIE announced a focus on cryptocurrencies) there is nothing brand new this year that we haven’t seen in previous years. It’s kind ofRead More »
04 February 2019
Advisers to the securities listed below are on the SEC’s radar for examination. Do you manage: an index fund that tracks custom-built indexes? a smaller ETF? an ETF with little secondary market trading volume? a fund with higher allocations to certain securitized assets? a fund that underperforms significantly relative to peer groups? a newer mutualRead More »
02 January 2019
The purpose of this compliance calendar is to help you keep track of regulatory filing deadlines for 2019. To receive reminders, make sure you join our mailing list! 2019 SEC Regulatory Deadlines for Investment Advisers The filing deadlines are listed below in chronological order, with additional details of RIA form and filing obligations toward theRead More »
13 December 2018
The focus on retirement accounts and senior investors has been on the SEC’s National Exam Priorities for years. However, it is especially so this year, and as the US population ages and more baby boomers enter retirement, the focus and concern for senior investors will continue to grow. Do you have a direct relationship withRead More »
20 November 2018
On October 31st, the SEC specifically addressed the Cash Solicitation Rule in its risk alert titled, “Halloween Risk Alert.” Well, now we know the SEC has a sense of humor… or is trying to. But in all seriousness, when OCIE issues a risk alert, you should take note. Why…? Because OCIE’s risk alerts are issued asRead More »
04 October 2018
In September 2018, an advisory firm was charged by the SEC and had to pay fines of $1 million dollars. Laying the Foundation This advisory firm is dually-registered (Broker Dealer and RIA). For a five-year period, independent contractors were provided access to client information through a remote web portal. The independent contractors used their ownRead More »
02 August 2018
“Best execution,” is a subjective target that is difficult to measure, rank, or define. In general, best execution is the effort of an adviser, to seek best price while also factoring in: expertise, sophistication, speed, and “the full range and quality of a broker-dealer’s services including, among other things, the value of research provided asRead More »
25 June 2018
The SEC recently updated the Staff Responses to Questions About the Custody Rule (“Custody FAQ”). And this time, it’s a relief! As you probably recall, in February 2017, the SEC said that advisers may have “Inadvertent Custody” due to language that is in the agreement between the custodian and the client, which caused much angstRead More »
16 March 2018
If you’re an RIA, this article is for you. Have you taken a peek at the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) National Exam Program Examination Priorities for 2018? (Look for a fun acronym for that once we get through all the good stuff.) Below, we summarize the examination priorities relevant to registeredRead More »