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Communiques

The latest compliance news from SEC3 and CCO3.

Weeding out the Bad Actors

August 05, 2013

On the infamous day in July when the SEC loosened the reins on general solicitation and proposed related new rules and rule amendments, the SEC also finalized the "bad actor" disqualification rules for most private placements (as required by the 2010 Dodd-Frank Act).

Read more: Weeding out the Bad Actors

 

SEC and European Regulators Establish Supervisory Cooperation Arrangements

July 25, 2013

On July 19th, the SEC announced the establishment of supervisory cooperation arrangements (memoranda of understanding) with European regulators related to the asset management industry. While the SEC initiative deals only with European regulators, it may signal increased interest by the SEC in its asset management registrants outside the United States especially given that some are new to their jurisdiction post Dodd-Frank.

Read more: SEC and European Regulators Establish Supervisory Cooperation Arrangements

 

The SEC lifts the ban on General Solicitation

July 11, 2013

The Securities and Exchange Commission (“SEC”) voted yesterday to eliminate the ban on general solicitation and advertising for offerings conducted under Rule 506 of Regulation D. Private investment funds can now offer their securities freely and solicit investors with no restriction provided that they:

  • take reasonable steps to verify that the investors are accredited investors; and

  • all purchasers of their securities fall within one of the categories of persons who are accredited investors under an existing rule (Rule 501 of Regulation D) or the fund reasonably believes that the investors fall within one of the categories at the time of the sale of the securities.

This means that although offers of fund interests will be unrestricted by private funds that will engage in general solicitation, sales of those interests will be restricted to accredited investors only and will be subject to the new verification requirement regarding accreditation.

Read more: The SEC lifts the ban on General Solicitation

 

Latest cease and desist order - Northern Lights and Gemini

May 09, 2013

The Securities and Exchange Commission (“SEC”) issued a cease-and-desist order against Northern Lights Compliance Services, LLC (“Northern Lights”), Gemini Fund Services, LLC (“Gemini”) and the trustees of two investment companies (“Funds”) for which Northern Lights and Gemini were service providers for “disclosure, reporting, recordkeeping and compliance violations”.

Northern Lights, a compliance firm which provided outsourced chief compliance officer services to the Funds, and Gemini, the Funds’ administrator, were each fined $50,000 for failure to perform their respective functions appropriately.

Read more: Latest cease and desist order - Northern Lights and Gemini

 

First Filing of Form NFA-PQR for CPOs and Form NFA-PR for CTAs

April 29, 2013

Quarterly Form NFA-PQR for registered CPOs

The first Form NFA-PQR for newly-registered CPOs whose registration became effective on January 1, 2013 is due sixty days from calendar-quarter end, i.e. by May 31, 2013 for the quarter ended March 31, 2013. Form NFA-PQR is filed every quarter by all registered CPOs. The NFA Form PRQ is distinct from the CFTC Form CPO-PQR which must be filed on a quarterly or annual basis depending on the assets under management (“AUM”) of the firm.

Read more: First Filing of Form NFA-PQR for CPOs and Form NFA-PR for CTAs

 

Mutual Funds - New SEC Sweep Exams and More

March 15, 2013

We have heard so much about the SEC's focus on private fund managers, but now attention is turning to include registered funds as well. OCIE Deputy Director Drew Bowden has warned the industry to expect upcoming sweeps. Areas of anticipated focus include 12b-1 fees and alternative investment companies.

Read more: Mutual Funds - New SEC Sweep Exams and More

 

Update: Marc Gabelli and Bruce Alpert vs SEC

March 11, 2013

On February 27, 2013, Chief Justice Roberts delivered the opinion of a unanimous U.S. Supreme Court in Gabelli, et al vs. U.S. Securities and Exchange Commission ("SEC"), ruling against the SEC. The Supreme Court, petitioned by Marc Gabelli and Bruce Alpert (the "petitioners"), reversed a decision of the US Court of Appeals for the Second Circuit which had affirmed the SEC's right to bring an enforcement action more than five years after the fraudulent conduct occurred.

Read more: Update: Marc Gabelli and Bruce Alpert vs SEC

 

SEC Announces 2013 Examination Priorities

February 26, 2013

On February 21, 2013, the SEC announced its 2013 exam priorities. The SEC outlined its market-wide priorities followed by priorities in four distinct examination programs:

  1. Investment Advisers and Investment Companies
  2. Broker-Dealers
  3. Clearing and Transfer Agents
  4. Market Oversight

In each of the above programs, the SEC will examine (a) ongoing risks (b) new and emerging risks and (c) policy issues.

Read more: SEC Announces 2013 Examination Priorities

 

Filing Dates for Form CPO-PQR and Guidelines for Calculating Assets under Management

February 14, 2013

Many Commodity Pool Operators (CPOs) are currently in the process of preparing to file the new Form CPO-PQR, which is required by the Commodity Futures Trading Commission (CFTC). Form CPO-PQR is filed with the National Futures Association (NFA). The frequency and extent of reporting on Form CPO-PQR depends on the assets under management (AUM) of a CPO.

Read more: Filing Dates for Form CPO-PQR and Guidelines for Calculating Assets under Management

 

Reminder: CFTC Annual Affirmation of Exemptions

February 05, 2013

All commodity pool operators (“CPOs”) and commodity trading advisers (“CTAs”) that claimed an exemption last year must re-affirm their exemptions within 60 days from calendar year-end. Firms that claimed exemptions from CPO registration under CFTC Rule 4.5 or CTFC Rule 4.13(a)(3) (the “deminimis exemption”), or Rules 4.13(a)(1), 4.13(a)(2), 4.13(a)(5) as well as firms that claimed an exemption from CTA registration pursuant to CFTC Rule 4.14(a)(8) must re-affirm those exemptions by March 1, 2013 or those exemptions will be automatically withdrawn.

The NFA’s guidance can be found here .

 

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Communiques

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Anna M. Bencrowsky, CRCP, CMFS Joins SEC3

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Events

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...

CHIEF COMPLIANCE OFFICER ROUNDTABLE: BREAKFAST BRIEFING

When: October 13, 2015 Where: Blank Rome LLP | The Chrysler Building | 405 Lexington Avenue | New York, NY 10174 22nd Floor Boardroom Thomas Westle and Janaya Moscony, along with...