The AICPA recently released for public comment a working draft of its Accounting and Valuation Guide: Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies (the “Guide”). The Guide is designed to provide investment companies that invest in securities issued by privately held enterprises with an overview of the valuation process and the roles and responsibilities of the various parties involved in the valuation process.  It…

On June 1, 2018 the SEC announced that it entered into settled enforcement proceedings with 13 registered investment advisers. According to the settled orders, the advisers failed to file and update Form PF over multi-year periods, in violation of Rule 204(b)-1 under the Investment Advisers Act of 1940.  Each of the advisers agreed to a $75,000 civil money penalty. Rule 204(b)-1 requires registered investment advisers with at least $150 million in private fund assets under…

In the third release comprising part of the package of proposed rules and forms related to broker-dealers’ and investment advisers’ standards of conduct, the SEC proposed a new disclosure document to be used by registered broker-dealers, registered investment advisers, and dual registrants. The new client relationship summary, or “Form CRS,” would provide certain basic disclosures to retail investors at the account opening stage. Form CRS would be an additive disclosure; it is not designed to…

On May 1, the SEC’s Division of Enforcement issued a series of frequently asked questions (FAQs) related to its Share Class Selection Disclosure Initiative (“SCSD Initiative”). The SCSD Initiative, which was originally announced February 12, 2018, provides that the Enforcement Division will agree to recommend to the Commission standardized, favorable settlement terms for investment advisers who self-report possible securities law violations related to their failure to make certain disclosures concerning mutual fund share class selection.…

According to the SEC, its April 18, 2018 release proposing an interpretation of the standard of conduct for investment advisers is intended to “reaffirm – and in some cases clarify – certain aspects of the fiduciary duty that an investment adviser owes to its clients under section 206” of the Investment Advisers Act of 1940. As discussed in greater detail in this alert, however, the proposed interpretation, if adopted, appears to expand the parameters of…

On April 18, 2018, the SEC introduced new Regulation Best Interest for broker-dealers and their associated persons when dealing with retail customers. This alert provides background of broker-dealer regulation, an overview of Regulation Best Interest, and our take on what this means for broker-dealers going forward. This alert is one in a series of Client Alerts on recent SEC proposals regarding regulation of broker-dealers and investment advisers. Read our client alert.…

At an open meeting held earlier today, the SEC voted 4-1 to propose a package of rules, forms, and guidance designed to define a new “best interest” standard of care for broker-dealers dealing with retail investors. The proposal would also require disclosure designed to help retail investors understand their relationship with their investment professionals, and to clarify the existing fiduciary standard of care applicable to investment advisers. Chairman Clayton notably characterized the proposals as an…