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The weekly news source for investment management legal and compliance professionals

Mutual Funds Seeking to Modify Fees Must Meet Disclosure Requirements

Many mutual funds and their advisers, attempting to comply with the DOL Fiduciary Rule and meet the requirements of the related Best Interest Contract Exemption, are considering ways to "level" the fees they charge clients. Any such changes, the Division of Investment Management says in its new Guidance, must meet disclosure and procedural requirements.
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Private Fund Adviser Charged with Failure to Disclose Conflicted Transactions

The SEC’s enforcement activities against private fund advisers apparently are not limited to those that registered with the agency. Consider the case of Chicago-based Augustine Capital Management, which, along with two of its three owners, was recently charged by the SEC with a myriad of allegations, including failure to disclose conflicted transactions to investors.
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Cybersecurity Vendors: Can They Answer Key Questions?

An advisory firm’s cybersecurity risks seem to grow with no end in sight, and vendor access to data just increases a firm’s vulnerability further. Make sure your cybersecurity vendors are doing what they need to do so that they are part of the solution, not part of the problem.
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Branch Office Examinations: What OCIE Wants to Know

When the SEC’s Office of Compliance Inspections and Examinations listed branch offices in its 2016 target list last January, it didn’t put much meat on the bones as to what examiners would be looking for, other than to say that they would "review regulated entities’ supervision of registered representatives and investment adviser representatives." A recent Guidance Alert from OCIE now spells out what advisory firms can expect.
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'Tis the Season for Gift-Giving Policies and Procedures

Whether advisory firm employees are gift-givers or gift-receivers this month, they need to make sure they follow not only gift regulations, but the firm’s policies and procedures. Chief compliance officers should make use of the holiday spirit to ensure that their firm’s policies and procedures are in accordance with regulatory requirements, and that they are followed.
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Ceresney’s Departure May Not Mean Less Enforcement

SEC Division of Enforcement director Andrew Ceresney, who will leave the agency before the end of the year, oversaw a period of increased enforcement of financial institutions, not least of which was investment advisory firms. But advisers and their defense counsel would be premature to break out the champagne bottles just yet. Not that much may change.
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Supreme Court Sides with Prosecutors in Insider Trading Case

The U.S. Supreme Court on December 6 gave Justice Department and SEC prosecutors an early holiday gift: it unanimously rejected a challenge to a lower court ruling on an insider trading case. In doing so, the Supreme Court returned one of the standards by which insider trading cases are judged to approximately where it was prior to 2014.
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Guidance Clarifies Reliance on Predecessor Registrations

Five questions, five relatively clear answers. That’s what the SEC Division of Investment Management provides in its latest guidance on when and how investment advisers may rely on predecessor registrations. Attorneys and consultants providing counsel to investment advisory firms would be wise to use the guidance.
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