In a July 2018 regulatory notice (Regulatory Notice 18-20, available here: http://www.finra.org/sites/default/files/notice_doc_file_ref/Regulatory-Notice-18-20.pdf), FINRA has requested that members notify it if they engage, or intend to engage, in any activities related to digital assets, such as cryptocurrencies. In addition, until
IM Insights
Providing securities and derivatives regulatory updates for investment management industry participants
IM Insights, published by Morrison & Foerster LLP, focuses on regulatory and compliance issues affecting financial services and investment management sectors. The blog covers topics such as SEC regulations, FINRA guidance, fund of funds rules, valuation practices for registered investment companies, and implementation of regulations like Regulation Best Interest and Form CRS. It provides updates on enforcement trends, compliance best practices, and legal developments relevant to broker-dealers, investment advisers, and fund managers. The content aims to assist industry participants in navigating complex regulatory frameworks and addressing operational risks associated with securities laws and investment company regulations.
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Massachusetts Takes on Risky Broker-Dealers That Offer Private Placements
By Hillel Cohn & Lloyd Harmetz
On July 2, 2018, the State of Massachusetts announced that it was investigating 10 broker-dealers that have 15% or more of their agents with current disciplinary incidents and that offer private placements to individual investors.
According to the announcement, the…
New Exemptive Rule Could Lower Barriers to Entry for New ETFs
By Kelley Howes
At an open meeting held June 28, 2018, the SEC voted unanimously to propose a new rule codifying exemptions to certain rules under the Investment Company Act. These exemptions have enabled the exchange-traded fund (ETF) industry to grow to more…
AICPA Draft Guide Available for Comment: Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds
By Kelley Howes
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…
SEC Brings 13 Settled Enforcement Proceedings for Failure to File Form PF
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…
CFTC Staff Issues Interpretation Regarding Position Limits Aggregation by Passive Investors in Commodity Pools
On May 2, 2018, staff of the Division of Market Oversight of the Commodity Futures Trading Commission (“CFTC”) issued an interpretation regarding CFTC Reg. 150.4(b)(1), 17 CFR 150.4(b)(1), which provides an exemption from the CFTC’s position limits aggregation rules for…
Retail Client Confusion Regarding Broker-Dealers and Investment Advisers: Call Me by Your Name
In a speech on May 2, 2018 regarding the SEC’s recent proposed broker-dealer standard of conduct, Jay Clayton, Chair of the Securities and Exchange Commission (SEC), commented as follows on retail investor confusion over whether their financial service providers…
SEC Proposes Simplified Relationship Summary for Broker-Dealers and Investment Advisers to Use with Retail Investors
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…
Enforcement Issues FAQs on the Share Class Selection Disclosure Initiative
By Kelley Howes
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…
The SEC’s Standard of Conduct Proposals Would Raise the Bar on Investment Advisers
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…