Fund Governance

SEC COVID-19 Actions: Report Exemptions Extended, Fund Borrowing Loosened

The SEC appears to be taking a hands-on approach as the coronavirus pandemic spreads. In the past week, it has, among other things, widened the window for which advisers and funds may take advantage of extended regulatory exemption deadlines that were established only the week before; adopted temporary exemptions allowing funds to borrow from affiliates and through other arrangements; and provided new exemptions for EDGAR filings, compliance with Regulation A and crowdfunding.

What’s in a Fund Name? The SEC Wants to Know

When is a name not a name? When it is a misnomer, of course, that is, when the name does not accurately reflect the identity of that which it purportedly identifies. For the SEC, that means requiring that funds have names that do not mislead investors, a requirement that it believes may need to be tweaked to stay current with the times.

LIBOR: Checklist Issued May Ease Transition to New Benchmark Rate

The financial industry’s shift away from the key benchmark rate it has historically used is picking up steam, with most of those affected likely to be using another benchmark by the end of next year. That said, the switch from the older rate, the London Interbank Offered Rate (LIBOR) is likely to be somewhat complex. A key government committee recently issued a checklist to help asset management firms and others manage their move.

SEC Proposes Expanding ‘Accredited Investor’ Definition

In a move likely to be at least partially welcomed by advocates of private funds and those that advise them, the SEC on September 18 proposed to widen the definition of who qualifies as an “accredited investor.” Under the proposed new definition, while wealth would continue as a factor, professional knowledge, experience or certifications would also count.

Associations Express Concerns about Parts of SEC’s Exemptive Application Proposal

The SEC’s recently proposed changes to the exemptive application process under the Investment Company Act have been generally well-received by investment companies, the advisers that manage them, and the associations that represent them. While that support for the overall thrust of the changes continues, concerns have been raised about several of their provisions.

SEC Proposes New Derivatives Rule

If at first you don’t succeed, try again. That appears to be what the SEC has done with the Commission’s unanimous November 25 vote to propose a new Derivatives Rule, designed to “modernize” or “standardize” the use of these financial instruments by mutual funds, exchange-traded funds and other registered funds, as well as business development companies. Now the ball is with the asset management community to decide whether they like this proposed Rule better than the last one.

Examiners Find Fund Problems with Compliance

In a new Risk Alert, the SEC’s Office of Compliance Inspections and Examinations shared the top compliance observations in regard to investment companies that examiners have found.

More Independent Directors on Fund Boards, Report Shows

Independent directors now comprise more than 75 percent of boards in most fund complexes, according to a new report. The report also shows that approximately two-thirds of fund complexes now have an independent chair.

Liquidity Risk Management Rule: Lessons Learned

Advisory firms seeking to comply with the Liquidity Risk Management Rule have seen several deadlines already pass, with two more coming up in the next few months. With that in mind, it seems a good time to take stock and review lessons learned.

Compensation Conflicts of Interest: SEC Staff Issues Disclosure FAQs

If the SECs recent string of settlements involving share class selection and other compensatory arrangements is not enough, the agencys Division of Investment Management is leaving no stone unturned. In a new set of answers to frequently asked questions, Division staff make it clear just what disclosure they expect from advisers when there is a compensation conflict of interest.

Audio Interviews

How to Read an SEC Enforcement Action

Stern Tannenbaum law firm partner Aegis Frumento on how to get the most from reading an SEC administrative order or court complaint.

Most Important Supreme Court Decisions for Advisers and Funds

Find out the high court decisions from recent years that are likely to affect how advisers and investment companies work from Debevoise partner Robert Kaplan. 

Top 10 Cybersecurity Steps to Take Now

Sutherland law firm partner Brian Rubin shares the most urgent cybersecurity steps for investment advisers.

Top Marketing Problems … and Solutions

Get solutions for the top marketing challenges that advisers face from ACA Compliance Group managing director Kimberly Daly

Watch Out for 5 Cybersecurity Myths

ACA Aponix Director Pascal Busnel on the most common cybersecurity myths that may cause firms to spend resources where they may not be needed.

The Hidden Costs of Non-Compliance

Proskauer law firm partner and former SEC Division of Investment Management deputy director Robert Plaze on why the costs of non-compliance go way beyond an SEC penalty.

CCO Liability: How to Protect Yourself

Find out from Blue Edge Capital CCO Margaret Fretz what chief compliance officers may be liable for and best practices to make sure you are protected.

Ethics or Compliance: Making the Choice

Find out the difference an ethics, rather than a compliance, perspective makes at an advisory firm from former Ethics and Compliance Officer Association COO Timothy Mazur.