Solicitors

Proposed Solicitation Rule Expands Beyond Cash

Perhaps not getting the same attention as the SECs proposed Advertising Rule (see separate story this issue), but important nonetheless, is the agencys proposed Solicitation Rule, which expands the reach of the Rule beyond cash compensation.

Adviser Settles Solicitor Rule Charges with SEC Following Two Examinations

Advisory firms that rely on a no-action letter to support their business practices should make sure that their interpretation of that letter is correct – especially when those business practices are ones the SEC pays particular attention to, like compliance with Rule 206(4)-3, the Solicitor Rule. An advisory firm that relied on such a letter […]

Know What Your Firm Solicits Before Moving on Compliance

There are two kinds of solicitation that advisory firms might pursue: seeking new advisory clients, and finding new investors for private funds. In terms of compliance, while the two solicitation types share some requirements, they dont share them all - and, in fact, there are some compliance requirements that are unique to each. It is essential that advisory firms design compliance procedures that address the type of solicitation they perform.

Cash Solicitation Fees are Legal, Except When …

Working with a third party to bring you new business is never as easy as it sounds. When you pay the third party, it gets complicated.

SEC Staff Clarifies Application of Cash Solicitation Rule to Hedge Fund Advisers

The SEC staff has confirmed that advisers that pay solicitors to refer investors to their hedge funds are not subject to the Advisers Act cash solicitation rule, Rule 206(4)-3, provided that the investors are being solicited only to invest in the advisers hedge funds, not to open a private managed account. The guidance was issued […]

OCIE Issues Second ComplianceAlert Letter

OCIE has issued its second-ever ComplianceAlert, a letter addressed to CCOs discussing areas of concern identified in recent SEC adviser and broker-dealer examinations. The letter highlights a number of weaknesses to avoid as well as best practices to adopt. Many of the letters observations will be familiar to experienced compliance professionals. Heres a quick overview:Personal […]

Referral Fee Payment to Mom Lands Executive in Hot Water

An executive who recommended sub-advisers for his employers new funds of hedge funds has been kicked out of the industry for failing to disclose that his mom received a referral fee from one of the sub-advisers he ultimately recommended. According to the SEC, Michael Donnell was hired by Mercantile Capital Advisors, an affiliate of Mercantile […]

Valuation, Cash Solicitation, and Advertising: Whats Next From the Division of Investment Management

Sure, youve heard about 12b-1 reform and the Form ADV Part 2 re-proposal. But there are plenty of other interesting projects on the Division of Investment Managements plate. At last weeks ALI-ABA investment adviser conference in New York City, Division of Investment Management chief counsel Douglas Scheidt and associate director Robert Plaze provided the industry […]

Highlights From the NSCP Conference

Some of the more interesting discussions from last weeks NSCP conference: E-mail word searches. At the Q&A session at the end of her keynote address, OCIE director Lori Richards was asked whether the SEC staff expects firms to conduct e-mail word searches. The conference attendee posing the question reported that his firm had run “dirty […]

Solicitation Guidance for Hedge Fund Advisers May be Forthcoming

You may have heard that staff from the SECs Northeast Regional Office, during remarks at a June CCOutreach event, announced that the staff will no longer cite SEC-registered advisers for failing to enforce the application of the cash solicitation rule to individuals or firms that refer investors for their hedge funds. Following that announcement, memos […]

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.