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Communiques

The latest compliance news from SEC3 and CCO3.

New SEC Guidance for Investment Advisers’ Obligations Regarding Proxy Voting

July 22, 2014

The SEC’s Divisions of Investment Management and Corporation Finance recently provided guidance (the “Guidance”) to investment advisers regarding their obligations in voting client proxies and retaining proxy advisory firms. The Guidance also covered proxy advisory firms directly regarding their reliance on popular exemptions from the federal proxy rules. In doing so, the regulators addressed the interplay between advisers’ fiduciary obligations and the Proxy Voting Rule. They also clarified that proxy advisory firms, when creating voting guidelines for advisers and institutional investors and acting to apply those guidelines in voting proxies, might jeopardize their ability to rely on exemptions from federal proxy rules.

Read more: New SEC Guidance for Investment Advisers’ Obligations Regarding Proxy Voting

 

Steps Directors Can take to Avoid SEC Enforcement

July 08, 2014

SEC Chair Mary Jo White recently shared steps directors can take to meet various SEC expectations. At the annual Stanford Directors’ College, Chair White highlighted the important role directors play in the eyes of the SEC and set out her planned agenda to discuss:

Read more: Steps Directors Can take to Avoid SEC Enforcement

 

Understanding SEC Enforcement

May 22, 2014

One of the main goals of any registered firm is to avoid an enforcement action.  The more you know about trends with regard to enforcement cases, the better equipped you are to succeed in that endeavor.  The good news is that the SEC is being more transparent with the industry than ever before with regard to goals, focus areas and its approach to enforcement.

Read more: Understanding SEC Enforcement

 

SEC Risk Alert - Cyber Security

April 18, 2014

As if April 15th wasn't bad enough? In addition to it being Tax Day, the U. S. Securities Exchange Commission's ("SEC") Office of Compliance Inspections and Examinations ("OCIE") issued a Risk Alert discussing the planned sweep exams that will assess registrant cyber-security readiness and to gather information related to recent experiences with cyber threats.

Read more: SEC Risk Alert - Cyber Security

 

If You Have Never Been Examined by the SEC, Get Ready

February 24, 2014

The Securities and Exchange Commission announced on Thursday, February 20th that its Office of Compliance Inspections and Examinations (OCIE) is launching an initiative directed at investment advisers that have never been examined, focusing on those that have been registered with the SEC for three or more years.

Read more: If You Have Never Been Examined by the SEC, Get Ready

 

SEC National Exam Program 2014 Exam Priorities

January 10, 2014

The Securities and Exchange Commission’s National Examination Program (“NEP”) has released 2014 examination priorities which can be found here. Much of what has been announced is a reiteration of prior focus areas. NEP-wide initiatives (not specific necessarily to the particular type of registrant) include fraud detection and prevention; corporate governance; conflicts of interest; enterprise risk management; technology; dual registrants; new laws and regulations, including general solicitation of private funds under Rule 506(c) under the Securities Act of 1933; and retirement vehicles.

Read more: SEC National Exam Program 2014 Exam Priorities

 

The Volcker Rule adopted after a 3-year wait

December 12, 2013

The Volcker rule was adopted on Tuesday, December 10, 2013 by five regulatory agencies including the Securities and Exchange Commission (the “SEC”). The original proposal was drafted in 2010 and received more that 19,000 comment letters from industry participants. The final rule was adopted by the SEC with a narrow 3 to 2 vote. It is interesting to read the strong dissenting opinions by Commissioners Gallagher and Piwowar who thought that the rule was so substantially different than the proposal that it should have been re-submitted for comment and not presented to the SEC for adoption in the rushed manner that it was presented at year-end. Commissioner Gallagher mentioned that the SEC received the final draft on December 5 which left little time for careful consideration.

Read more: The Volcker Rule adopted after a 3-year wait

 

The Importance of Effective Compliance Programs in Preventing Enforcement Actions

December 03, 2013

Stephen L. Cohen, the Securities and Exchange Commission’s (“SEC”) Associate Director of Enforcement, spoke recently at the Society of Corporate Compliance and Ethics’ Annual Conference.  In his remarks he noted what he considers characteristics of effective and ineffective compliance programs and how having a strong compliance program can impact the SEC staff’s decision on whether or not to bring an enforcement case against a firm as well as the extent of penalties and sanctions pursued. Mr. Cohen said: “When evaluating a company’s misconduct, we typically give credit when a company can demonstrate a strong compliance culture”.

Read more: The Importance of Effective Compliance Programs in Preventing Enforcement Actions

 

Hot Topics in National Futures Association Audits

November 13, 2013

As a result of the rescission of Rule 4.13(a)(4) for commodity pool operators (CPOs) advising funds offered to qualified eligible persons and the narrowing of the exclusion under Rule 4.5 available to registered investment companies, almost 600 new CPOs registered with the Commodity Futures Trading Commission (CFTC) and became members of the National Futures Association (NFA). The number of registered CPOs increased from 1,200 to 1,800. Currently-registered CPOs manage over 6,000 commodity pools. Before the advent of the new registrants, the first audit was generally expected within the first year of registration.

Read more: Hot Topics in National Futures Association Audits

 

Why We Don't See the SEC's New Rules Implementing the Jobs Act Altering the Way Hedge Funds Market in the Short Run

October 29, 2013

On September 23, 2013, SEC regulations adopted on July 10, 2013 to implement Section 201(a) of the JOBS Act will be effective. We are not seeing firms rush to generally solicit by marketing heavily or un-password protect their websites. In fact, what we are seeing is firms proceeding thoughtfully and cautiously. Most realize at this point that what initially was perceived as a new found freedom for private funds, is actually a maze of hurdles that must be carefully cleared before private funds can actually determine that they should in fact take advantage of new Rule 506(c) and “generally solicit”.

Read more: Why We Don't See the SEC's New Rules Implementing the Jobs Act Altering the Way Hedge Funds Market in the Short Run

 

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Newsletter

Get the latest compliance news and insights - delivered weekly. The SEC3 Communique covers all compliance topics. CCO3 focuses on Mutual Fund CCO topics.
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Communiques

SEC3 Newsletter

Commentary: How Compliance Officers & Firms Can Help Limit CCO Personal Liability This article originally appeared on the Thomson Reuters Regulatory Intelligence subscription service for compliance and risk professionals and is... read more »

Wishing One-and-All a Happy, Healthy and Prosperous New Year

We hope each of you found some peace and tranquility in the company of loved ones this holiday season and want to wish one-and-all a happy, healthy and prosperous New... read more »

Understanding How to Mitigate Liability and Navigate Insurance Options (Part II)

In June, we shared our thoughts around common insurance gaps and insurance riders that CCOs as well as managers should understand. One of the gaps we shared related to pre-claim... read more »

Cybersecurity - What have we learned and what have we done?

Regulatory Landscape In April 2015, the Securities and Exchange Commission ("SEC's") Division of Investment Management issued a guidance update, identifying cybersecurity as a critical issue. Several regulators are in fact focusing... read more »

Gatekeepers in SEC Crosshairs

Ever since the enforcement cases were announced as part of the SEC’s “Operation Broken Gate,” the SEC enforcement division has continued to ramp up scrutiny of gatekeepers including third-party service... read more »

Anna M. Bencrowsky, CRCP, CMFS Joins SEC3

We are pleased to announce that Anna M. Bencrowsky, CRCP, CMFS has joined SEC3 as a Senior Consultant. Prior to joining SEC3, Anna held several executive compliance positions. Anna recently retired... read more »

Events

Upcoming Events - September & October 2017

Upcoming Events Don’t miss the opportunity to meet with us in person to discuss the topics that matter most to you. SEC3 is teaming up with industry experts in NYC to discuss...

May 23, 2017 - Webcast: WannaCry Ransomware: Were You Really Protected or Just L…

When: Tuesday, May 23rd, 2017 | Schedule: 12pm - 1pm EST Who: Paul Caiazzo, CEO and Co-Founder, TruShield Security Solutions Michael Brice, Founder, BW Cyber Services John Lukan, Managing Director, SEC Compliance Consultants, Inc. We...

June 14, 2017 - Compliance Breakfast Briefing

8:30-9:00am - Networking and Continental Breakfast 9:00-10:30am - Program Location: Willkie Farr & Gallagher LLP | 600 Travis Street | Suite 2310 | Houston, TX Barry Barbash from Willkie Farr & Gallagher LLP,...

June 13, 2017 - Compliance Breakfast Briefing

8:30-9:00am - Networking and Continental Breakfast 9:00-10:30am - Program Location: Haynes and Boone, LLP | 2323 Victory Avenue | Suite 700 | Dallas, TX 75219 Validated parking is available in the garage attached...

May 31, 2017 - Chicago

9:00-9:30 a.m - Networking and Continental Breakfast 9:30-11:00 a.m - Program Location: Baker & McKenzie LLP | 300 East Randolph Drive | Suite 5000 | Chicago, IL 60601 Kristin Gonzalez and Jerome Tomas...

May 17, 2017 (NYC WIMF)

This event is by invitation only. Please email info@seccc.com to learn more.

May 15, 2017 (NYC Chief Compliance Officer Roundtable)

9:00-9:30am - Networking and Continental Breakfast 9:30-11:00am - Program Location: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone:...

Webcast: The Most Insidious Cybersecurity Threat Is Also The Least Understood

When: Tuesday, April 25th | Schedule: 12pm - 1pm EST Who: Paul Caiazzo, CEO and Co-Founder, TruShield Security Solutions Michael Brice, Founder, BW Cyber Services John Lukan, Managing Director, SEC Compliance Consultants, Inc. Ransomware, the...

CCO Liability (Part III): Managing Liability Webinar

In this webinar, panelists discuss indemnifications and insurance as potential remedies to address the direct financial risks to a CCO. Attendees will learn: What terms and conditions should Chief Compliance Officers be...

Webinar: CCO Liability (Part III): Managing Liability: Navigating Indemnities an…

When: Tuesday, February 21, 2017 Schedule: 11:00am ET / 10:00am CT / 9:00am MT / 8:00am PT / 7:00am AT Description of Webinar: The National Society of Compliance Professionals is pleased to host...

Webcast: SEC 2017 Examination Focus Area – Cybersecurity Testing

Penetration Testing & Vulnerability Assessments - Examining the SEC & FINRA Requirements When: Wednesday, January 25th | Schedule: 12pm - 1pm EST Who: Paul Caiazzo, CEO and Co-Founder, TruShield Security Solutions Michael Brice, Founder,...

Chief Compliance Officer Roundtable: Breakfast Briefing

When: October 20, 2016 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone: 212.885.5000 Thomas Westle and Janaya...

Practicing Law Institute - Hedge Fund Management 2016

When: September 15, 2016 Where: New York & concurrent webcast | 1177 Avenue of the Americas | New York, NY 10036 Schedule: 9:00 am – 5:00 pm Janaya Moscony, President of SEC3 will...

CHIEF COMPLIANCE OFFICER ROUNDTABLE: BREAKFAST BRIEFING

When: April 13, 2016 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 22nd Floor Boardroom Thomas Westle and Janaya Moscony, along with industry experts,...

COMPLIANCE SCIENCE SUMMIT 2015

When: November 17, 2015 Where: Convene Midtown East | 730 Third Avenue | New York, NY 10017 Janaya Moscony, President, SEC Compliance Consultants, Inc. will be moderating a...