The longstanding view of the Department of Labor (the “DOL”) has been that proxy voting and other shareholder rights held by an ERISA plan are subject to ERISA’s fiduciary duties of prudence and loyalty. Previously, this view was expressed by the DOL in sub-regulatory guidance, such as interpretive and field assistance bulletins. In September of 2020, the DOL published a proposed rule (the “Proposal”) regarding an ERISA fiduciary’s duties with respect to shareholder rights. On…

Funds & Investment Management Law Blog

SEC’s OCIE Publishes Investment Adviser Branch Office Risk Alert

By Leslie S. Cruz, Stephanie M. Monaco, Adam D. Kanter & Peter M. McCamman

December 14, 2020

On November 9, 2020, the Office of Compliance Inspections and Examinations (“OCIE”) of the US Securities and Exchange Commission (“SEC”) published a risk alert discussing its observations from a series of examinations that focused on SEC-registered investment advisers operating from numerous branch offices and with operations geographically dispersed from the adviser’s principal or main office. In this initiative, OCIE staff assessed, among other things, the advisers’ compliance and supervisory practices relating to advisory personnel working…

Funds & Investment Management Law Blog

The Department of Labor’s ESG-less Final ESG Rule

By Joseph A. Lifsics

November 12, 2020

On October 30, 2020, the U.S. Department of Labor (“DOL”) released its final regulation (“Final Rule”) relating to a fiduciary’s consideration of environmental, social and governance (“ESG”) factors when making investment decisions for plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). In response to the proposed rule (the “Proposal”), the DOL received several thousand comments, the vast majority of which opposed the new rule. Many plan sponsors and…

Funds & Investment Management Law Blog

DOL Proposed Rule Urges Caution Regarding the Use of ESG Factors When Selecting Investments for ERISA Plans

By Joseph A. Lifsics

June 30, 2020

On June 22, 2020, the United States Department of Labor (the “DOL”) submitted a proposed regulation (the “Proposal”) regarding the use of Environmental, Social and Governance (“ESG”) factors in selecting investments for plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Proposal generally cautions plan fiduciaries against considering ESG factors when making investment decisions, unless such factors are relevant to the plan’s pecuniary goals. Interest in ESG-themed investments has…

Funds & Investment Management Law Blog

U.S. Carried Interest Regulations Delayed for Second Review

By Matthew A. McDonald

June 11, 2020

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On June 2, 2020, the long-awaited carried interest proposed regulations were returned to the Office of Management and Budget (OMB) for a second round of review. The OMB’s Office of Information and Regulatory Affairs (OIRA) previously completed its review of the proposed regulations on February 27, 2020 and the funds and alternative investments industry has been eagerly been awaiting their release ever since. The reason for the additional round of OMB review is unknown, although…

Funds & Investment Management Law Blog

DOL Issues Guidance about Private Equity Investments in 401(k) Plans

By Lennine Occhino

June 8, 2020

The Department of Labor’s recent pronouncement on the permissibility of investing 401(k) and other defined contribution plan assets in private equity has gotten wide-spread attention. Yet the guidance, which was issued in the form of an information letter, does not establish any new fiduciary principles, or provide any exemptions under the Employee Retirement Income Security Act of 1974 (“ERISA”). This blog discusses why the recent guidance is so significant and what it does and does…

Funds & Investment Management Law Blog

SEC Proposes Valuation Rule for Registered Funds

By Peter M. McCamman

May 6, 2020

On April 21, 2020, the US Securities and Exchange Commission proposed new rule 2a-5 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), which is intended to address valuation practices and the role of the board of directors with respect to the fair value of the investments of an investment company or business development company registered under the Investment Company Act (each, a “fund”). Specifically, proposed rule 2a-5 would establish requirements…

Funds & Investment Management Law Blog

SEC’s OCIE Issues Risk Alerts on Compliance with Regulation Best Interest and Form CRS

By Peter M. McCamman

April 20, 2020

On April 7, 2020, the U.S. Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) issued two companion risk alerts on compliance with Regulation Best Interest and Form CRS. In the press release accompanying these risk alerts, OCIE stated that these alerts are intended to provide broker-dealers and investment advisers with advance information about the expected scope and content of the initial examinations for compliance with Reg. BI and Form CRS,…

Funds & Investment Management Law Blog

Survival Tips for Investment Advisers in the Wake of COVID-19

By Peter M. McCamman

March 20, 2020

Business Continuity Plans (“BCPs”) continue to be a key component of an investment adviser’s risk management and compliance program, but have traditionally focused on emergency planning for certain external and internal disruptions (such as natural disasters, blackouts and occasional short-term market disruptions to normal operations). The recent impact of COVID-19 however, has reminded the industry of the need for implementing BCPs and other related risk policies that address not only short-term disruptions but also longer-term…

Funds & Investment Management Law Blog

COVID-19: Recent SEC Responses applicable to Investment Advisers and Funds (Updated)

By Peter M. McCamman, Leslie S. Cruz, Stephanie M. Monaco & Adam D. Kanter

March 19, 2020

As COVID-19 continues to impact global markets, the U.S. Securities and Exchange Commission (“SEC”) have recently provided certain guidance and targeted relief in recognition of the potential disruption that COVID-19 may have on market participants regulated by the Commission. The following Mayer Brown client alerts describe and take a closer look at certain COVID-19 related SEC guidance and targeted relief that primarily impacts investment advisers and funds. US SEC Provides Temporary, Conditional Relief to Funds and …

Funds & Investment Management Law Blog

News & Views on Legal Issues Facing Fund Managers and Investment Management Professionals

Blog Authors

Final ERISA Regulations Describe Fiduciary Duties Related to Plan Proxy Voting

SEC’s OCIE Publishes Investment Adviser Branch Office Risk Alert

The Department of Labor’s ESG-less Final ESG Rule

DOL Proposed Rule Urges Caution Regarding the Use of ESG Factors When Selecting Investments for ERISA Plans

U.S. Carried Interest Regulations Delayed for Second Review

DOL Issues Guidance about Private Equity Investments in 401(k) Plans

SEC Proposes Valuation Rule for Registered Funds

SEC’s OCIE Issues Risk Alerts on Compliance with Regulation Best Interest and Form CRS

Survival Tips for Investment Advisers in the Wake of COVID-19

COVID-19: Recent SEC Responses applicable to Investment Advisers and Funds (Updated)

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