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The weekly news source for investment management legal and compliance professionals

Topic: Rules and Rulemaking

OCIE Reveals Most Common Cash Solicitation Rule Deficiencies

November 9, 2018
SEC’s Office of Compliance Inspections and Examinations wants advisers to know the violations its examiners are finding when they visit advisory firms. In recent months, it has issued Risk Alerts highlighting the most common deficiencies cited involving best execution, fees and expenses, and more. Its latest Risk Alert focuses on adviser compliance issues related to Advisers Act Rule 206(4)-3, the Cash Solicitation Rule.

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SEC Plans Final Standards of Conduct Action by September 2019

November 9, 2018
The SEC’s Fall 2018 Regulatory Agenda makes clear that Chairman Jay Clayton is moving forward on one of his top priorities: adopting final standards of conduct rules and amendments by September 2019.

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Fund Association Wants SEC to Propose Rule for Summary Shareholder Reports

November 2, 2018
The Investment Company Institute (ICI) has made a proposal to the SEC as part of its answer to the agency’s request for comment on ways to enhance fund disclosure for investors. The association, which represents regulated funds worldwide, suggested in a comment letter that the Commission propose a rule creating a new, optional summary shareholder report that would ostensibly make the full shareholder report easier for investors to understand while also helping them compare funds.

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Blass Wants Readable Fund Disclosures, Opens Door to New Derivatives Rule

November 2, 2018
SEC Director of Investment Management Dalia Blass donned the mantle of a writing coach in a recent speech to investment company professionals, urging those who write fund disclosures to “tell a clear story,” “write clearly and consistently,” and watch for individual sentences that contain more than 70 words.

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Study from AARP and Other Groups Finds SEC’s Proposed Form CRS Confusing

October 5, 2018
The SEC proposed Form Customer Relationship Summary to make the differences between advisers and broker-dealers easier for retail investors to understand – but it may not be passing that test. Three major consumer groups – the AARP, the Financial Planning Coalition and the Consumer Federation of America – in their comment letter to the SEC revealed that an independent study of investors “indicate the need for the Commission to revise and retest the content, language and format of the CRS.”

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Asset Management Community Strongly Supports ETF Rule with Some Caveats

October 5, 2018
Associations representing investment companies and others in the asset management community have come out strongly in favor of the SEC’s proposed Exchange-Traded Funds Rule. It’s rare that support is 100 percent, however – most of those supporting the proposal also had suggestions for changes or further improvements.

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SEC Cleans Up Disclosure Requirements

August 24, 2018
In an attempt to simplify and update its disclosure requirements, the SEC on August 17 adopted amendments to existing requirements that it said have become duplicative, overlapping, outdated or superseded by new requirements.

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Five Settlements Show the SEC’s Determination to Enforce the Testimonial Rule

August 16, 2018
There’s talk of the SEC revising parts of the Advertising Rule, including its ban on testimonials. That day may come, perhaps sooner than later – but until it does, the agency’s Division of Enforcement is making clear that violations of the Advertising Rule, in particular its testimonial ban, will be prosecuted.

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Advisers and Funds Cautiously Move Forward on Liquidity Rule Compliance

August 16, 2018
Many advisory firms and fund complexes are taking steps to comply with the requirements of the SEC’s Liquidity Risk Management Rule, but there are differences in how they comply – not only between advisers and fund complexes, but within each group. Changes in some of the requirements and deadlines have added to the mix.

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Industry Representatives Seek Changes to SEC’s Proposed Standards of Care

August 10, 2018
Harmonize rules for investment advisers and broker-dealers. Impose federal licensing and education requirements on advisory firms. Require advisers to provide clients with account statements. Codify advisory firms’ fiduciary duty in a rule. If these possibilities from the SEC’s standards of care package proposed in April give you concern, you can take solace knowing that some major industry heavy hitters share them, and have some other concerns, as well.

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SEC Strategic Plan Draft Calls for Cybersecurity, Enforcement, Revisiting Rules

July 6, 2018
The SEC’s draft five-year strategic plan for 2018 through 2022 – the first released by chairman Jay Clayton – centers around three high-concept goals: Investors, innovation and performance. Within those three goals, however, are more practical initiatives focusing on a variety of topics, including cybersecurity, enforcement and revisiting existing rules.

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SEC Adopts Liquidity Classification Changes, Proposes Standard ETF Exemption

July 6, 2018
The SEC on June 28 took some major steps toward fulfilling its agenda, and in ways that will ease work for advisers and funds. Among them were adopting the changes it proposed this past March to the classification requirements of the Liquidity Risk Management Rule, and a proposal that would allow certain exchange-traded funds to operate without first having to obtain a fund-specific exemptive order.

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Associations Support Proposed Liquidity Rule Changes. . . But Suggest More

June 15, 2018
The period for public comments on the SEC’s proposed amendments to the Liquidity Risk Management Rule is over, and the comments, at least from three major associations in the asset management community, appear to be positive – but with suggestions for more changes.

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Advertising and Custody Rule Reform on SEC’s Latest Regulatory Agenda

June 8, 2018
It’s beginning to look like the next 12 months may be a period of wish fulfillment for advisers, funds and attorneys who have long called for the SEC to reform some of its existing Advisers Act rules, the Advertising Rule and the Custody Rule among them.

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SEC Adopts Rule Bringing Fund Report Delivery into the 21st Century

June 8, 2018
The Commission, perhaps realizing that what looked like the future is already here, on June 5 made a quantum leap: It adopted a Rule allowing mutual funds, exchange-traded funds and other investment funds to offer investors the ability to give up paper shareholder reports and instead opt to view those reports online.

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DOL Won’t Enforce Prohibited Transactions Claims in Light of Court Action

May 11, 2018
The last rites for the Department of Labor’s Fiduciary Rule are turning out to be an extended affair.

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Clayton and Blass Defend and Seek Input on Proposed Standards of Conduct

May 4, 2018
Proposing new standards of conduct may turn out to have been the easy part. The SEC now has to persuade the asset management community to buy into the proposals.

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Guidance is No Substitute for Rulemaking, But Helpful When Used Correctly

April 27, 2018
When the Division of Investment Management or the Office of Compliance Inspections and Examinations issues a guidance update or a risk alert, it is usually meant as a means to help advisers, investment companies, broker-dealers and others comply with securities laws and regulations. But just what are the benefits and drawbacks of guidance?

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SEC Proposes Broker-Dealer Best Interest Standard, Adviser Fiduciary Interpretation

April 20, 2018
The SEC on April 18 laid down its initial markers on the subject of standards of conduct for both broker-dealers and advisers – while making clear that it expects and welcomes changes.

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SEC Commissioner Adds Her Voice to Call for Retrospective Rules Review

March 30, 2018
SEC commissioner Hester Peirce has made no bones about it: She wants the agency to conduct ongoing retrospective reviews of existing rules to see if those rules, both individually and collectively, "accomplish what they were designed to do."

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