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Topic: Trading Desk Issues

Liquidity Risk Management Rule Compliance: Don’t Wait for 2018, Prepare Now

October 28, 2016
December 1, 2018 may seem like a long time away, and June 1, 2019 even longer. But smart chief compliance officers at advisory firms managing mutual and exchange-traded funds will not let those dates lull them into putting off needed preparations to comply with the SECís final liquidity risk management rule, adopted earlier this month. The time to begin compliance preparations is not in 2018 or 2019, but now.

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SEC Charges Adviser for Steering Clients to More Expensive Share Classes

August 26, 2016
Less than three weeks after the SEC announced in a risk alert that it would be scrutinizing advisory firms that, without disclosure, place clients in mutual fund share classes that are more expensive than others, the agency charged an adviser with doing just that.

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Trading Desk Challenges: What Advisers Need to Know

April 15, 2016
Advisers need to pay particular attention to their trading desks. Thatís where securities are bought and sold, and, for that reason, itís where a lot of things can go wrong.

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Portfolio Rebalancing: Know When It’s Needed and Avoid Red Flags

March 25, 2016
One of a portfolio managerís responsibilities is making sure that portfolio investments match the allocation percentages listed in a clientís governing documents. When those percentages change, the portfolio managers may need to rebalance the allocations Ė and do so in a way that does not cause compliance problems.

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Prearranged Trades May Set Your Firm Up for SEC Enforcement

January 15, 2016
Watch out for red flags telling you that portfolio managers prearranged trading to favor one set of clients over another. Failure to act on those flags is likely to prearrange two other results: an SEC investigation followed by an enforcement action.

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Rule 105 Dragnet: SEC Snares Six More Advisers, One for the Second Time

October 30, 2015
Itís round three in the ongoing SEC Rule 105 initiative. With apparent satisfaction that its campaign against advisers that participate in public stock offerings after short selling those same stocks is going well, the agency recently announced six more settlements that brought in more than $2.5 million in fines.

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Marking the Close: SEC Mostly Wins in Market Manipulation Appeal

July 30, 2015
Market manipulation is a big deal to the SEC. You can expect the Commission to hang tough when its orders in cases alleging such activities are challenged Ė and a recent U.S. Court of Appeals ruling would seem to back that strategy.

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Long and Short: SEC Expects Accurate Data from Advisers

July 24, 2015
Next time you report trades to brokers, make certain you correctly characterize them. One firm just settled with the SEC for $4.25 million and was forced to admit wrongdoing in regard to the agencyís allegations of mischaracterizing long and short sales.

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Trade Sequencing: Navigate Risks with Thorough Disclosure

October 10, 2014
How advisers sequence trades is a bit of an art as well as a science.

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Rule 105 Crackdown: 19 More Firms Settle

September 26, 2014
The SECís Rule 105 dragnet continues. Nineteen advisory firms and one individual trader settled September 16 in the face of charges that they violated Rule 105 of Regulation M, part of the agencyís ongoing campaign to prevent violations of the Rule.

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Failure to Disclose Trading Strategies Leads to Decision Against Adviser Execs

May 2, 2014
Two key players at an investment adviser acting as a fund sub-adviser learned the value of disclosure the hard way.

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Stay Several Steps Ahead of the Rule 105 Crackdown

March 14, 2014
Smart and effective compliance practices are critical to staying one step ahead of the ongoing SEC crackdown on violators of Regulation Mís Rule 105.

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Rule 105 Crackdown Continues as SEC Charges Another Adviser

January 24, 2014
There are probably many ways to get the SEC's attention, but violating Rule 105 of Regulation M of the Exchange Act seems to be particularly effective.

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Be Careful Your Next Trade Doesn’t Come Out in the Wash

January 17, 2014
Now would be a good time to review your firmís buys and sells. Both the CFTC and the SEC are focusing on any matches that might qualify as "wash trades," the immediate or almost-immediate selling and buying of the same security without a bona fide purpose, often done to manipulate the market.

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Portfolio Pumping and Window Dressing: Look for Patterns

October 12, 2013


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SEC Launches New Crackdown on Rule 105 Violators

September 20, 2013


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Analyze Your Trade Blotter and Increase Compliance

August 3, 2013


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SEC Extends Principal Trades Rule Through 2014

December 31, 2012


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SROs Get Their Marching Orders on the Consolidated Audit Trail

July 29, 2012


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SEC Extends Broker-Dealer Compliance Deadlines Under Large Trader Reporting Rule

April 25, 2012


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