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The weekly news source for investment management legal and compliance professionals

SEC Scrutinizes PE Fund Manager Adherence to Operating Documents

Private equity fund managers may not be as used to SEC oversight as are other advisers. They would be wise, then, to regard a recent agency settlement as a lesson learned: The SEC will scrutinize books and records to make sure fund managers are operating within the limits of their operating documents. Those that are not may find themselves facing an enforcement action.
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Protect Your Firm and Clients Against MNPI Risks in Bank Loan Investments

Some advisers are expressing interest in investing fund or other client assets in bank loans. Such loans may pay higher yields than other fixed income investments – but they also may carry higher risks, including exposure to material non-public information and potential insider trading issues. If you choose to invest in these loans, know the risks and the best practices to keep your clients and your firm safe.
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Electronic Messaging May Be Subject of New Sweep Examination

Advisory firms should consider preparing for what may be a new SEC sweep exam: electronic messaging. While it is not yet certain that such sweep exams have begun or are scheduled to begin, advisers would be wise to review their policies and procedures, as well as how they use and document such forms of communication as instant messaging, text/SMS messaging, emails sent and received on non-company systems, and personal or private messaging.
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DOL Seeks Public Input on Further Delay and Changes in Fiduciary Rule Exemptions

The dust is far from settled when it comes to Department of Labor Fiduciary Rule exemptions. The DOL on June 29 issued a "request for information" seeking public input on extending the applicability date of certain exemptive provisions associated with the Fiduciary Rule, as well as possibly changing the requirements of those provisions in the exemptions. The result, if extended dates are adopted and/or those exemptive requirements are changed, may bring relief, confusion and perhaps some frustration to advisers who would otherwise have had to comply with all the exemptive provisions by January 1.
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SEC Staff Issue Form ADV FAQs as Compliance Deadline Approaches

Form ADV is changing – and advisers that do not take the time to learn how to answer the new questions may find themselves scrambling for answers as the October 1 effective date draws near. It may seem far off, but it’s only a little more than 90 days away. The SEC’s Division of Investment Management earlier this month issued answers to 23 frequently asked questions to help advisory firms prepare.
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