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The weekly news source for investment management legal and compliance professionals

Topic: Technology

Cryptocurrency: SEC Takes Action Against Hedge Fund Manager

September 14, 2018  It was only a matter of time before it happened. The SEC on September 11 took what it called its “first-ever enforcement action” against a hedge fund manager marketing digital assets. The firm had raised more than $3.6 million for such investments over a four-month period – but the agency charged that it did so using misrepresentations and registration failures.
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The CAT Takes a Step Forward and a Step Back

September 7, 2018  The SEC is finding that its progress in creating a comprehensive electronic blueprint of securities transactions, the Consolidated Audit Trail (CAT), is proving as difficult as getting real cats to do what you want. It issued a statement that demonstrates the forward-and-back nature of this project: the arrival of a detailed master plan, but the delay of three key deadlines by a year.
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Technology: IAA Urges Treasury to Recommend a Principles-Based Approach

May 18, 2018  As new technologies and networks proliferate among advisory firms and other non-bank financial institutions, many will require regulation, but will that regulation encourage innovation, or stifle it? The Investment Adviser Association, in a recent letter to the Department of the Treasury, urged the Department to support innovation by recommending and encouraging regulators to adopt regulations that are principles-based.
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Machine Learning and Artificial Intelligence Increasingly Part of SEC Oversight

May 11, 2018  Artificial intelligence may or may not be here yet, depending on one’s definition of AI. There is little doubt, however, that machine learning – the analysis of data by machines without direct human direction – has already found a home at the SEC and is growing.
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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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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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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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Electronic Messaging May Be Subject of New Sweep Examination

July 7, 2017  Advisory firms should consider preparing for what may be a new SEC sweep exam: electronic messaging. While it is not yet certain that such sweep exams have begun or are scheduled to begin, advisers would be wise to review their policies and procedures, as well as how they use and document such forms of communication as instant messaging, text/SMS messaging, emails sent and received on non-company systems, and personal or private messaging.
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