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The weekly news source for investment management legal and compliance professionals

Qualified Client Threshold Adjusted

It’s just a little adjustment – but a little may make the difference between being able to charge performance fees or not. The SEC on June 14 adjusted the dollar threshold used to exempt an adviser from the prohibition on charging performance fees.
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House Bill Would Ease Burden on Investment Advisers

The House Financial Services Committee on July 16 passed a bill with bipartisan support that would ease the regulatory burden on investment advisers, particularly those managing private funds. But while welcomed by some key players in the financial services industry, it has a long way to go before becoming law.
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SEC Fines Morgan Stanley $1 Million for Cybersecurity Compliance Gaps

The SEC wants advisers and broker-dealers to know that it takes cybersecurity compliance very seriously – and will bring enforcement actions against firms that fail to take required steps. Witness its June 8 settlement with financial giant Morgan Stanley Smith Barney. The investment adviser and broker-dealer will pay a $1 million fine to settle charges that the company’s failure to protect the personally identifiable information of approximately 730,000 accounts allowed hackers to steal and sell the customers’ information online.
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White Reveals SEC’s Future Regulatory Agenda for Investment Companies

Thought fund regulations were looking difficult with the proposed liquidity management and derivatives rules, and the expected proposed actions later this year on stress testing and transition plans? The party’s not over yet. Get ready for even more SEC regulations down the pike, including disclosure effectiveness, exchange-traded funds, accurate portfolio pricing, and cybersecurity.
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An Effective Cybersecurity Response Plan: Your Best Protection

When the cyber event occurs, you don’t want to be caught unprepared. The best way to be ready for any cybersecurity threat is to have an effective cybersecurity response plan in place, one that offers clear, plain-English instructions for how to handle events when they occur, yet that is flexible enough to adapt to different types of threats.
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Proposed Incentive-Based Compensation Rule: Advisers Should Pay Attention

The proposed rule issued May 6 by the SEC and five other federal agencies that would prohibit financial institutions from offering incentive-based compensation encouraging inappropriate risk taking should be viewed with concern by at least large investment advisers. While the rule would affect only advisers with more than $1 billion in assets, the way the SEC counts such advisers may mean that some firms that believe they are under the threshold may actually fall within it.
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