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The weekly news source for investment management legal and compliance professionals

Topic: SEC Operations and Agenda

Peirce Calls for Digital Token Safe Harbor

August 2, 2019
Long a backer of digital innovation in the securities markets, SEC Commissioner Hester Peirce on July 30 called for the creation of a digital token safe harbor that would permit issuers to offer tokens "under an alternative regime with robust requirements."

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Peirce Critical of ESG Standards and Their Effect on Advisers and Proxy Firms

July 26, 2019
Likening it to the use of the letter A in Nathaniel Hawthorne’s The Scarlet Letter, SEC Commissioner Hester Peirce has called out what she terms the increasing use of the environmental-social-governmental (ESG) label as a measuring stick for investments.

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SEC Report Card: OIG Focuses on Information Security and More

July 19, 2019
The SEC, those regulated by it may be glad to know, is itself scrutinized – by its internal Inspector General, whose office issues a report to Congress every six months. The most recent report makes clear that the SEC is not bulletproof, needs better information security, and is the subject of audits concerning its analytics initiatives, information technology investments and more.

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Clayton Backs Simultaneous Resolution of Settlement Offers and Waiver Requests

July 12, 2019
Advisers and their attorneys face a problem when the SEC acts on a settlement offer but holds off on granting related waiver requests – leaving them in the position of having to decide whether to accept a settlement without knowing whether needed waivers are forthcoming. Those facing agency enforcement will likely be happy to know that SEC Chairman Jay Clayton this month came down on the side of simultaneous resolution of both.

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SEC Will Revisit Registration Exemptions, 401(k) Private Fund Investments

July 12, 2019
The SEC is seeking public comment on ways to reform registration exemptions in order to "expand investor opportunities while maintaining appropriate investor protections." The concept release and request for comment is expected to, among other things, look at ways to ease the ability of 401(k)s and other retail investor retirement vehicles to invest in private funds.

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SEC Names New Chief of Staff

June 28, 2019
The SEC on June 26 named as its chief of staff Sean Memon, who has served as the agency’s deputy chief of staff since May 2017.

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Clayton Addresses Recent Court Rulings and the Path Forward

June 28, 2019
The SEC has been buffeted by several court decisions in recent years – Kokesh in 2017, Lucia in 2018, Robare and Lorenzo this year. At least two of these had a negative impact on how the agency’s Division of Enforcement operates, while one can be seen as enhancing the Division’s enforcement authority. SEC Chairman Jay Clayton, in a recent speech, described his thoughts about these decisions and how the SEC intends to move forward.

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Peirce: SEC Needs to Move Forward on More Kinds of ETFs

June 21, 2019
SEC Commissioner Hester Peirce commends the Commission for proposing a Rule that standardizes most exchange-traded funds, but she wants the agency to approve more novel kinds of ETFs, including those that are non-fully transparent, leveraged or inverse.

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Association Calls for Changes in Fund Proxy Voting and Communication

June 21, 2019
The Investment Company Institute, in its third comment letter to the SEC regarding changes involving proxies and proxy voting, called for the agency to forego requiring shareholder approval for certain topics, and creating a new way for funds to achieve a majority vote for others. At the same time, the ICI, which represents regulated funds, urged the SEC to require intermediaries to provide their fund shareholder lists to funds.

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SEC Moves Custody Rule Reform to the Fast Track

June 14, 2019
The SEC plans to propose amendments that will reform the Custody Rule within the next 12 months. The rule’s reform will join agency plans to take other actions within that same time period, including changes to the Advertising Rule, long identified within the asset management community as needing reform, the Cash Solicitation Rule, the use of derivatives by investment companies, and fund of funds arrangements.

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Adviser Waives New ALJ Hearing Despite Lucia Ruling, Settles Charges

May 31, 2019
An advisory firm and its founder, despite an Appeals Court ordering a rehearing with a different administrative law judge of a previous ALJ decision, on May 16 settled charges with the agency that it engaged in fraudulent trade allocations and misused soft dollars. The firm owner was permanently barred from the securities industry and agreed to pay disgorgement of $669,965.

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Associations Support FSOC Financial Institution Evaluation Changes

May 17, 2019
Asset management associations this month issued letters of strong support for proposed guidance from the Financial Stability Oversight Council (FSOC) that would alter the way the Council evaluates non-bank financial institutions – a group that includes investment advisers, investment companies and broker-dealers – in terms of their systemic risk to the country’s financial stability.

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Peirce Calls for ‘Reasonableness’ in SEC Regulation and Enforcement

May 17, 2019
SEC Commissioner Hester Peirce wants the SEC to be more reasonable in how it regulates and enforces, arguing that two recent developments – the agency’s Share Class Disclosure Initiative and the Supreme Court’s Lorenzo decision – give her concern.

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SEC Names New Fraud Unit Co-Chief

May 3, 2019
The SEC on May 2 filled a hole in the Division of Enforcement’s Asset Management Unit, naming Adam Aderton as the unit’s co-chief. The spot has been open since the previous co-chief, Anthony Kelly, left the agency in November 2018.

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Clayton Pledges to Complete Standards of Conduct Package for Advisers and Brokers

April 26, 2019
Without getting into the specifics of what they will contain, SEC Chairman Jay Clayton this month pledged to complete what has become a somewhat controversial set of proposals: the agency’s standards of conduct for advisers and broker-dealers.

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Commissioner Raises Concerns that Staff Guidance Amounts to ‘Secret Law’

April 19, 2019
SEC Commissioner Hester Peirce, in an April 8 speech, questioned whether staff guidance, while necessary, "may have turned into a body of secret law" that "binds market participants like law but is immune from judicial – and even Commission – review."

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FSOC Shifts its Financial Stability Focus from Institutions to Activities

April 12, 2019
Members of the asset management community are surely breathing a sigh of relief now that the Financial Stability Oversight Council (FSOC) has proposed interpretive guidance that calls for reviewing financial risks at non-bank financial companies based on activities rather than on the institutions themselves.

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Proxy Advisory Firm Use: Roisman Suggests SEC Consider Guidance

April 5, 2019
SEC Commissioner Elad Roisman thinks the time has come for the agency to consider issuing new guidance for asset managers in their use of proxy advisory firms. The SEC’s point man on ways to improve the proxy process, the relatively new commissioner made his views known at a recent industry conference, where he also said that he is seeking answers to a lot of questions about both the use of proxies and proxy advisory firms.

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Digital Assets: SEC Provides Framework for Determining When They May be Securities

April 5, 2019
The SEC’s approach to the use of cryptocurrencies to date has to a large degree focused on whether those digital assets are securities. Now, in its latest step to regulate this growing segment of the market, the agency has issued a "framework" to help those working with digital assets determine if those assets may, in fact, be securities.

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Get the Most Out of Exemptive Applications and No-Action Requests

March 29, 2019
Whether applying for a job, seeking to secure financing or sending the SEC an application for an exemptive order or a request for no-action relief, it is always wise to put your best foot forward. No sense damaging your chances with an application that is poorly written, disorganized or omits key information. There are steps that attorneys for advisers, funds and others can take to ensure their process gets off to a good start.

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