The SEC recently announced a few of its accomplishments spanning from April 2013 through
April 2016, which highlighted the following misconduct
by investment advisers and investment companies.
The highlighted misconduct included cases involving fraud, actions to ensure the safety of client assets and first-of-their kind actions enforcing the investment adviser pay-to-play rules.Actions include cases against:
The SEC highlighted its promotion of improved compliance and enhanced asset management oversight. During fiscal 2015, SEC staff conducted nearly 2000 examinations — an increase over each of the prior five fiscal years. These examinations resulted in the return of approximately $120 million to investors. The SEC examination staff:
Completed thePresence Exam Initiativein which the staff conducted approximately 400 exams of hedge fund and private equity fund advisers over a two-year period;
Launched the "Never-Before Examined” Initiativeto engage with the investment advisers that have been registered for three years or more but have never been examined and investment company complexes that have never been examined;
Launched an initiative to assess whether investment advisers are fulfilling their fiduciary and contractual obligations to clients in wrap fee programs;
Expanded and enhanced the use of targeted examinations as a technique to identify and address higher-risk activities focusing on such areas ascyber-security practicesof broker-dealers and investment advisers; and
Launched a multi-phase Cybersecurity Exam Initiative, examining more than 100 registered broker-dealers and investment advisers to understand how these entities are addressing their cybersecurity needs.
Companies, foreign and domestic, are required to file registration statements, periodic reports, and other forms electronically through EDGAR. Let us file your Forms D, 13F, 13G, 13D, and 13H, among others.
The SEC Crowdfunding rules and forms are effective May 16, 2016. Crowdfunding is a relatively new and evolving method of using the Internet to raise capital to support a wide range of ideas and ventures. The Jumpstart Our Business Startups Act (the ‘‘JOBS Act’’) establishes a regulatory structure for startups and small businesses to raise capital through securities offerings using the Internet through crowdfunding.
REPORT ON DIGITAL INVESTMENT ADVICE
FINRA's Report on digital investment advicediscusses digital investment advice tools, highlights broker-dealers' obligations under FINRA rules and shares effective practices related to these tools, including technology management, portfolio development and conflicts of interest mitigation. The reportalso provides considerations for investors in evaluating investment advice derived from digital investment advice tools.
DEPARTMENT OF LABOR: ERISA
The Department of Labor (“DOL”) has issued a final regulation defining who is a ‘‘fiduciary’’ of an employee benefit plan under the Employee Retirement Income Security Act of 1974 (“ERISA”) as a result of giving investment advice to a plan or its participants or beneficiaries. The final rule treats persons who provide investment advice or recommendations for a fee or other compensation with respect to assets of a plan or IRA as fiduciaries in a wider array of advice relationships. The final rule is effective June 7, 2016, although DOL has determined that an applicability date of April 10, 2017,
is adequate time for plans and their affected financial services and other service providers to adjust to the basic change from non-fiduciary to fiduciary status.
Regulatory compliance, risk management, and corporate governance advisory services that help the asset management sector understand and implement regulatory directives.
FINRA Provides Guidance on Firm Responsibilities for Sales of Pension Income Stream Products: 16-12.
Private Placements and Public Offerings Subject to a Contingency: 16-08.
Form PF due for all RIAs
Brochure delivery date for RIAs
Annual audited financial statements for RIAs not registered
Quarterly report of NAV for 4.7 Exempt CPOs
Form 13F due for Form 13 Filers
Form PF due date for Large Hedge Fund Advisers.
NFA Form CPO-PQR for all but Large CPOs.
CFTC Form CPO- PQR due date for Large CPOs.
FBAR must be filed with FinCEN by FBAR Filers
New EFOCUS System Framework
FINRA has enhanced the Electronic Financial and Operational Combined Uniform Single (EFOCUS) application, which firms use to file specific financial and operational reports pursuant to SEC and FINRA rules, with a new dashboard layout. Access to the EFOCUS system through the Firm Gateway, FOCUS forms layout and navigation remain unchanged.