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The weekly news source for investment management legal and compliance professionals

Topic: Guidance

Regulation S-P: OCIE Puts Advisers and Broker-Dealers on Notice

April 19, 2019  At least some advisers and broker-dealers are not complying with privacy notice and safeguard policy requirements under Regulation S-P, and the SEC’s Office of Compliance Inspections and Examinations, in an April 16 Risk Alert, lets all advisers and brokers know that examiners are keeping a sharp eye out for such violations. In short, it is saying: You’ve been warned, so don’t complain if you get cited for such violations during an exam.
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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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Blass: SEC Not Ready to Make Research-Related Exemption Permanent

March 22, 2019  Those looking to the SEC to extend or make permanent a temporary exemption tied to broker-dealers unbundling research costs from execution costs did not hear the best news at a recent industry conference. That’s when agency Division of Investment Management Director Dalia Blass told attendees that the Investment Management staff is not yet prepared to recommend such a course to the Commission.
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SEC Risk Alert on Safeguarding is Good Checklist for Transfer Agent Monitoring

March 8, 2019  The latest Risk Alert from the SEC’s Office of Compliance Inspections and Examinations is written to help transfer agents comply with safeguarding requirements, but advisers can make use of it, too.
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Electronic Messaging: OCIE Wants Advisers to Adopt Better Controls

December 21, 2018  Use of social media, texts and other types of electronic messaging, as well as employment of mobile and personal devices, count as business communications as much as email or paper documents. Advisers must establish proper policies and procedures, train employees, provide supervisory review and establish control over such communications and the devices used.
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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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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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SEC Withdraws Two No-Action Letters Regarding Use of Proxy Advisory Firms

September 21, 2018  The SEC on September 13 did something unexpected: It pulled two 2004 Division of Investment Management no-action letters concerning advisers’ use of proxy advisory firms in preparation for a planned November roundtable on the subject. What made the move unusual was not that the agency decided to supersede the letters, but that it did so by actually removing them, rather than simply issuing new guidance indicating a change of course.
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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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Think You Don’t Have Custody? Think Again

November 10, 2017  Some advisers may believe they don’t have to comply with Rule 206(4)-2, the Custody Rule, because they do not possess client assets. Such a belief could get them in trouble, both with clients and with the SEC. Turns out there are at least five types of custody – and only three of them involve asset possession.
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Advertising Rule Violations: OCIE Lets Advisers Know Which Get Cited Most

September 22, 2017  Advisers now have even less of an excuse for violations of Rule 206(4)-1, the Advertising Rule, than they did before. With the Office of Compliance Inspections and Examinations’ issuance of a risk alert listing the most frequent Advertising Rule compliance issues identified during examinations, the agency is leaving little doubt as to what may constitute a violation.
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OCIE Finds Increased Cybersecurity But Wants More

August 11, 2017  The SEC’s Office of Compliance Inspections and Evaluations on August 7 made public its observations from its most recent round of cybersecurity exams – and what it found is encouraging only to a point. The message delivered by OCIE in its National Exam Program risk alert was this: Advisory firms, broker-dealers and investment companies have made strides in providing cybersecurity, but there is still a long way to go.
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