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The weekly news source for investment management legal and compliance professionals

Topic: SEC Operations and Agenda

Clayton Rejects Request to Extend CAT Deadline

November 17, 2017
SEC chairman Jay Clayton on November 14 issued a nuanced statement?rejecting a request from the national securities exchanges and FINRA to delay the initial deadline of the Comprehensive Audit Trail – better known as the CAT – by a year, and other deadlines by a year or more. His decision leaves at least the short-term implementation of the much-discussed high-tech tool up in the air.

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SEC Brought Fewer Enforcement Actions in 2017, But . . .

November 17, 2017
Advisers and their attorneys may take some solace from the SEC reporting that fiscal year 2017 saw the agency bring 754 enforcement actions, compared with 868 the year before, but it is far too soon and there are too many facts tied to individual cases to draw any conclusions. Nonetheless, the FY 2017 figures mark the first time the enforcement case total has declined for several years, having risen each year since at least FY 2013, when 676 enforcement actions were brought.

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Clayton Seeks Shorter Agenda with Greater Transparency

November 10, 2017
The new SEC is gradually taking shape as key executives at the agency make their views known. One recently called for less of a focus on minor infractions, another for a greater focus on retail enforcement and cybersecurity. Now SEC chairman Jay Clayton is perhaps tying it all together with a big ribbon that calls for a shorter agency agenda and greater transparency.

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Treasury Urges Liquidity Rule Compliance Date Delay, No Classification Buckets

November 3, 2017
The Treasury Department’s 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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SEC Turning Away from ‘Broken Windows’ Enforcement

November 3, 2017
It looks like the SEC plans to break fewer windows under chairman Jay Clayton than it did under former chair Mary Jo White. What’s more, there may be less emphasis on seeking admissions of wrongdoing when settling cases. The co-director of the agency’s Division of Enforcement reportedly made both these points in a panel discussion at a recent securities conference.

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New OCIE, Trading and Markets Directors Named

October 27, 2017
The SEC moved ahead with appointing key people this month. Peter Driscoll on October 26 was named director of the agency’s Office of Compliance Inspections and Examinations, a post he has held as acting director since January 2017.

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SEC Nominees Offer Guarded Views on Cybersecurity, Rules and Enforcement

October 27, 2017
One typically does not learn a great deal about nominees for public posts, like serving as an SEC commissioner, at the Senate confirmation hearings. They are, after all, not unlike job interviews and the candidates’ main goal is to get confirmed – so answers tend to be carefully worded and designed not to raise eyebrows. That said, some sense of where candidates stand tends to come through.

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OIG to SEC: Improve Information Security, Regulatory Oversight, Contract Management

October 13, 2017
When it rains, it pours. A little more than two weeks after the SEC began dealing with the public fallout from the cyber breach of one of its key electronic systems, its Office of the Inspector General issued its annual statement on the agency’s management and performance challenges. While the statement identified some progress the SEC made in addressing these challenges, it found significant areas for improvement.

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SEC Cyber Breach Resulted in Access to Personally Identifiable Information

October 6, 2017
At least two individuals had their names, dates of birth and social security numbers accessed by third parties as a result of the SEC’s 2016 cyber breach, Commission chairman Jay Clayton disclosed October 2. His disclosure also left open the possibility that the agency’s internal review might uncover more individuals with accessed personally identifiable information.

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SEC Work with DOL on Standards of Conduct Already Underway

September 29, 2017
SEC chairman Jay Clayton’s testimony before a Senate committee was not limited to cybersecurity. He also used his September 26 testimony before the Senate Committee on Banking, Housing and Urban Affairs to address other topics, including developing standards of conduct for advisers and broker-dealers – and let Congress and the public know that collaboration with the Department of Labor on these standards has already begun.

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After the Cyber Breach: SEC Faces Questions, Clayton Testifies, Effect on the CAT

September 29, 2017
The asset management industry, including the SEC, is weighing the impact of the cybersecurity breach that agency chair Jay Clayton recently disclosed to the public (ACA Insight, 9/25/17). In the wake of the disclosure, the SEC announced a new initiative, Clayton testified before a Senate committee, and industry leaders and observers speculated as what it all might mean for future regulation and oversight, including the launching of the agency’s Comprehensive Audit Trail (CAT).

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Clayton Reveals Potential Harm from Past SEC Cybersecurity Incident

September 22, 2017
SEC chairman Jay Clayton, in a September 20 cybersecurity statement providing an overview of how the agency is addressing its own cybersecurity threats, revealed that the SEC last month discovered that an earlier-detected agency breach had created an opportunity for "illicit gain."

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IAA Wants SEC to Keep Fiduciary Standard for Advisers, Create New Standard for Brokers

September 15, 2017
The Investment Advisers Association has staked out its position in the ongoing tussle over creating appropriate standards of care for advisory firms and broker-dealers. The SEC, it believes, should retain the existing Advisers Act’s fiduciary standard for investment advisers, while creating a new and separate "best interest" standard for broker-dealers that is just as stringent.

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New SEC Takes Shape with a Flurry of Nominations and Appointments

September 7, 2017
They weren’t the first new SEC names since the Trump administration took office, but the commissioner nominees and staff appointees named in recent days have perhaps provided the best indication yet of what the agency under chairman Jay Clayton will look like and the direction it may take.

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Liquidity Risk Management First Steps: Define Program, Assign Responsibility

August 25, 2017
There’s no time like the present for fund managers to start working on compliance with the SEC’s Liquidity Risk Management Rule. The compliance deadline may be months away, but wise firms will use that time to begin the compliance process by assigning responsibility and defining a program that matches their funds’ investment portfolios. Those that do will be well-positioned to tackle the additional compliance challenges that await. Those that don’t may find themselves scrambling as compliance deadlines approach.

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Associations and Firms Want SEC/DOL Coordination on Standard of Conduct

August 18, 2017
More than 90 comments have been received by the SEC to date in response to agency chairman Jay Clayton’s June 1 call for comments in regard to standards of conduct for investment advisers and broker-dealers. Among the trends emerging from the comments received to date is that the SEC, in coordination with the Department of Labor, create a separate standard of conduct for broker-dealers.

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SEC Conducting Unannounced Examinations

August 11, 2017
At least one of the SEC’s regional offices is conducting unannounced examinations on investment advisers – and other SEC offices may notice and follow suit.

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Grim Will Leave SEC Next Month

August 4, 2017
The SEC announced August 3 that Division of Investment Management director David Grim will leave the agency in September.

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SEC Enforcement Today and Tomorrow: Big Data, Machine Learning and Artificial Intelligence

July 20, 2017
SEC enforcement already relies on technology. That reliance will only grow in future years, with the agency’s use of data analysis increasingly married to machine learning and artificial intelligence. Advisers should be aware that actions they take will often turn up in data, and that the SEC can be counted on to use that data in ever-more sophisticated ways.

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Capital Formation, Enforcement, Exams Rank High as Clayton Urges Budget Approval

July 14, 2017
SEC chairman Jay Clayton has begun the process of putting his mark on the SEC, its activities, and the perceptions of those it regulates. In addition to his "principles" speech in New York City on July 12, he recently appeared before Congress to justify the agency’s $1.6 billion budget request for fiscal year 2018.

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