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The weekly news source for investment management legal and compliance professionals

Topic: Rules and Rulemaking

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

July 6, 2018
The SECís draft five-year strategic plan for 2018 through 2022 Ė the first released by chairman Jay Clayton Ė 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 SECís 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 Ė but with suggestions for more changes.

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

June 8, 2018
Itís 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 Laborís 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 Ė 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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DOL Fiduciary Rule Tossed Out by Appellate Court

March 23, 2018
Things are beginning to look pretty gloomy for the Department of Laborís Fiduciary Rule. A U.S. Court of Appeals for the 5th Circuit three-judge panel this month struck down the entire Rule, describing it as "backdoor regulation." With the SEC now working on its own fiduciary regulations that may prove dominant in this area, the DOL is now faced with the question of whether the appellate court ruling is worth appealing.

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SEC Reverses Itself and Votes Against Public Reporting of Liquidity Classifications

March 16, 2018
In something of a turnaround, the Commission on March 14 voted, 3 to 2, to change a previously adopted liquidity classification requirement. Under the proposed amendments, funds will no longer need to publicly report the classification buckets their securities fall into. Instead, they will simply need to provide a qualitative narrative describing how their liquidity risk management programs are working.

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Liquidity FAQs Fill in the Blanks on Classification by Asset Class

March 9, 2018
When the SEC delayed the Liquidity Risk Management Rule classification compliance date by six months recently, it also issued a new set of answers to frequently asked questions that should make fund compliance with the Rule somewhat easier. The FAQs, which follow up on an earlier set issued in January, provide agency staff thinking on a variety of topics, including classifying liquidity by asset class, the 15 percent limit on illiquid investments, and more.

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SEC Extends Liquidity Rule Classification Deadline by Six Months

February 23, 2018
Mutual fund managers concerned about the requirements of the SECís Liquidity Risk Management Rule got a partial reprieve on the evening of February 21. The Commission voted to create an interim final rule extending the compliance deadline for the most contentious part of the Rule Ė the requirement that open-end funds classify their securities into four liquidity groupings, often referred to in the industry as "buckets" Ė by six months.

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Advertising Rule Reform: What to Expect

February 9, 2018
Reform of Rule 206(4)-1, the Advertising Rule, has long been a goal of many in the investment advisory community. With the new SEC chair, Jay Clayton, now indicating that he too would like to see some long-term agency rules revisited, it is beginning to look like 2018 may be the year when the Advertising Rule is brought in line with the realities of todayís business world.

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SEC Liquidity Risk Management FAQs Flesh Out ETFs, Role of Subadvisers

January 18, 2018
Funds and advisers with questions about liquidity risk management programs may breathe a bit easier Ė at least if some of those questions pertained to how in-kind exchange-traded funds work and the role of sub-advisers. The SECís Division of Investment Management on January 10 issued FAQs that address at least some of the questions that have arisen in these areas.

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SEC May Propose Its Own Fiduciary Rule by Second Quarter

January 12, 2018
Itís an ambitious target, but the SEC is reportedly planning to propose a Fiduciary Rule that would cover all brokers Ė not just those selling retirement accounts Ė by the second quarter of this year. That could mean that there will be a proposed rule in about 10 weeks, but it could also mean in about five months, depending on whether "by the second quarter" means the beginning or the end of that quarter.

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2017 in Review: A New SEC, Cybersecurity Threats and the Fiduciary Rule

December 29, 2017
The past year saw a great deal of change and development in the asset management community, but three loom larger than others: A new SEC with Jay Clayton at the helm, bringing different priorities than his predecessor; exacerbating cybersecurity concerns, with the SEC itself one of the victims; and the Department of Laborís Fiduciary Rule and its exemptions, delays in their taking effect, and the increasing likelihood of SEC involvement in the process.

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DOL Finalizes18 Month Delay for Fiduciary Rule Exemptions

December 1, 2017
What everyone expected to happen, happened on November 29. The Department of Labor published in the Federal Register its decision to extend the transition period for compliance with three Fiduciary Rule exemptions by 18 months: from January 1, 2018 to July 1, 2019. It also extended its non-enforcement policy regarding those exemptions for the same time period.

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Treasury Urges Liquidity Rule Compliance Date Delay, No Classification Buckets

November 3, 2017
The Treasury Departmentís recommendations that the SEC postpone at least one of the scheduled compliance dates for Rule 22e-4, the Liquidity Risk Management Rule, and eliminate the requirement that funds categorize assets into four liquidity classifications was an industry-friendly move that will likely find much applause in the asset management industry.

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