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Communiques

The latest compliance news from SEC3 and CCO3.

SEC Highlights Importance of Risk Assessments

February 21, 2015

The SEC stated in their 2015 Examination Priorities that, as was the case in prior years’ priorities, the Commission will conduct “focused, risk-based examinations”. This guidance confirms that investment advisers should be engaged in identifying risk areas and working to correct any deficiencies prior to the SEC conducting an examination. We have also recently seen a number of our client firms being requested by prospective investors to show them their risk assessments.

Read more: SEC Highlights Importance of Risk Assessments

 

SEC Issues Risk Alert with Cybersecurity Sweep Examinations Summary

February 04, 2015

On February 3, 2015, the SEC released their long-awaited Risk Alert reviewing the results of OCIE's cybersecurity sweep examinations in 2014 that followed their April 2014 Risk Alert on cybersecurity issues. OCIE's sweep examinations covered 57 registered broker-dealers and 49 registered investment advisers with respect to cybersecurity practices at those firms.

The Staff performed these examinations to better understand how broker-dealers and advisers address the legal, regulatory, and compliance issues associated with cybersecurity and to assess the examined firms' vulnerability to cyber-attacks.

Read more: SEC Issues Risk Alert with Cybersecurity Sweep Examinations Summary

 

SEC Announces Examination Priorities for 2015 - And New Year’s Resolutions for CCOs

January 14, 2015

As the SEC has been doing at the start of each year in recent years, the SEC announced its examination priorities for the new year. For 2015, the SEC’s priorities focus on three general areas: (i) protecting retail investors and investors saving for retirement; (ii) assessing market-wide risks; and (iii) using enhanced data analytics to identify illegal activity.

The SEC highlighted certain additional priorities, and of these we think the following are more noteworthy to our investment adviser and registered investment company clients:

Read more: SEC Announces Examination Priorities for 2015 - And New Year’s Resolutions for CCOs

 

Recent SEC Speech Highlights Continued Focus on Private Equity

December 05, 2014

In her recent keynote address at the Columbia Law School Conference on Current Issues in Securities Regulation (November 21, 2014), Commissioner Kara Stein stressed the importance of transparency in securities markets including private equity, a market in which, as she indicated, most of the investors are public and private pension funds, endowments, and foundations holding the money of teachers, policemen, firemen and public and private universities. Although these institutional investors are typically sophisticated, the degree of sophistication varies between investors representing small state plans as opposed to large university endowments. In addition, even institutional investors do not possess OCIE’s enhanced access to a registrant’s records, so they would all benefit from robust disclosure. Thus, transparency is an important investor protection tool. Commissioner Stein voiced her concern that disclosures in private equity lack rigor.

Read more: Recent SEC Speech Highlights Continued Focus on Private Equity

 

Annual ADV Registration Fee Deadline

November 12, 2014

Registered investment advisers with state filings are required to annually renew their state ADV registration or their state notice filings of their federal ADV. They are also required to annually renew the state registrations of their investment adviser representatives.

Read more: Annual ADV Registration Fee Deadline

 

Custody Rule Violations - Deliberate and Inadvertent

November 04, 2014

On October 29, 2014, the SEC charged a registered investment adviser, its two principals and the chief compliance officer with repeated violations of the Custody Rule (Rule 206(4)-2 under the Advisers Act). The advisory firm managed a number of pooled investment vehicles and failed to distribute audited financial statements to investors within the 120-day window from fiscal-year end as mandated by the Custody Rule.

Read more: Custody Rule Violations - Deliberate and Inadvertent

 

SEC Announces Record Number of Enforcement Cases in 2014

October 22, 2014

The SEC announced that for its fiscal year that ended in September, it filed a record 755 enforcement actions covering a wide range of misconduct, and obtained orders totaling $4.16 billion in disgorgement and penalties. By contrast, in FY 2013, the SEC filed 686 enforcement actions and obtained orders totaling $3.4 billion in disgorgement and penalties. In FY 2012, the SEC filed 734 enforcement actions and obtained orders totaling $3.1 billion in disgorgement and penalties.

Read more: SEC Announces Record Number of Enforcement Cases in 2014

 

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

 

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

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More SEC Settlements - This Time Form PF Filing Deficiencies

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Two Recent Enforcement Actions Against Private Fund Advisers

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2018 - Are you ready for your next SEC exam?

The pool of registered investment advisers that will be subject to an SEC exam in 2018 is at the highest level seen in years. The SEC projects it will examine... read more »

Navigating the Changes to Form ADV

On August 25, 2016, the U.S. Securities and Exchange Commission adopted numerous substantive and technical amendments to Form ADV. While the adopting release required advisers to begin complying with the... read more »

Events

Dorsey PF 2018 Symposium

When: September 26, 2018 (8:30 am - 6 pm Where: Dorsey & Whitney LLP | 51 W. 52nd Street | New York, NY 10019 Directions > SEC3’s President, Janaya Moscony will join...

Chief Compliance Officer Roundtable: Breakfast Briefing - June 14, 2018

When: June 14, 2018 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone: 212.885.5000 Schedule: 9:00-9:30am - Networking...

Webinar: 2018 SEC Exam Priorities & Recent Exam Highlights

Don’t miss the opportunity to meet with us in person to discuss the topics that matter most to you. Tobin S. Cochran, Managing Member/President of Focus 1 Associates, LLC and...

Chief Compliance Officer Roundtable: Breakfast Briefing - February 7, 2018

When: February 7, 2018 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 | 22nd Floor Boardroom | Phone: 212.885.5000 Schedule: 9:00-9:30am - Networking...

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,...