Regulatory, Standard of Care, Compliance, Enforcement

Costly 13F Filing Violations, ChatGPT Policy Considerations, Insight Into New Fiduciary Rule Proposal: Lessons Learned & Worth Reading for March 2023

March 23, 2023 BDIA Editors Leave a comment

ACA Group’s Lessons Learned and thought leadership:

Failure to Follow the Rules Can Be Costly
“Does Your Company Need a ChatGPT Policy? Probably”. Chat GPT is a certainly a hot topic. The New York University School of Law’s Program on Corporate Compliance and Enforcements raises thoughtful considerations.
Communicating with the SEC When Your Organization Suffers a Cybersecurity Incident. MoFo (Morrison Foerster) provides some tips about when to proactively report hacking incidents to the SEC.
NYDFS Issues Guidance on Virtual Currency Custody Practices. For those following the evolving virtual currency custody environment, Dechert’s Financial Services Group recently addressed the New York Department of Financial Services’ (NYDFS) guidance.
The DOL’s New Fiduciary Rule: What We Can Expect. Fred Reish and Joan M. Neri of Faegre Drinker weigh in on the DOL’s anticipated new fiduciary rule proposal.

Additional thought leadership and Insights can be found here.

Regulatory, Compliance, Enforcement

Shortened Settlement Cycles, Form ADV Amendments and Hackers Impact Derivatives Market: Regulatory Update for March 2023

March 23, 2023 Cari Hopfensperger Leave a comment

March Regulatory Updates from Cari Hopfensperger at ACA Group:

Plus, To Do Checklists for March and April 2023, and more here.

Regulatory, Standard of Care, Compliance, Enforcement

SEC’s amendments to Rule 10b5-1 and new state privacy laws — ACA Regulatory Updates

February 21, 2023 Cari Hopfensperger Leave a comment

February Regulatory Updates from Cari Hopfensperger at ACA Group:

Topics include:

News for All Firms
- SEC Amends Rule 10b5-1 Restricting Insider Trading
- State Privacy “Class of 2023” – Several New Privacy Laws Taking Effect
News for Investment Advisers
- 10 States Now Require IARs to Complete Annual Continuing Education
- Form 13F Amendments to Make Data More Usable Take Effect
News for CPOs/CTAs
- NFA Reminds Members to Confirm Exemption Status of Entities They Do Business With
 Lessons Learned
- SEC Fines Service Provider $5 Million for Securities Fraud: Service Providers Beware!
- I’m Ready for My Close-Up: Former PM Leverages Investment to Get His Daughter in the Movies
- Adviser Keeps Revenue Sharing on the Down Low – and Gets SEC Smackdown

Fiduciary Duties and ESG — Is it really Everything, Everywhere All at Once?

February 1, 2023 Clifford E. Kirsch, Editor Leave a comment

SEC 40 Act lawyers and those in the ESG space will want to take note of Commissioner Uyeda’s speech published on Jan 27 (SEC.gov | ESG: Everything Everywhere All at Once) in which he lays out an adviser’s fiduciary duty as a battleground for future discussion about ESG investments. Uyeda says “… an adviser can only pursue an ESG investment strategy if the client expresses a desire to pursue such a strategy after receiving full and fair disclosure regarding the salient features of the strategy, including the strategy’s risk and return profile.” It will be interesting to see if Chair Gensler looks for an opportunity to respond to Uyeda’s remarks. Don’t be surprised if we see remarks by Chair Gensler that address an adviser’s duty more generally and not just in connection with established an ESG investment strategy. Maybe something along the lines of yes, an adviser can only pursue an ESG investment strategy where a client expresses such a desire, but as a general matter all advisers should be at least considering ESG factors as they do other important data points when making an investment. Lots more to come……

Regulatory, Standard of Care, Compliance

SEC proposes service provider oversight requirements for investment advisers

November 9, 2022 Clifford E. Kirsch, Editor Leave a comment

On October 26, 2022, the Securities and Exchange Commission (SEC) proposed new Rule 206(4)-11 under the Investment Advisers Act of 1940 (Advisers Act), which would prohibit SEC-registered investment advisers from outsourcing certain services or functions to service providers without meeting minimum requirements. At the same time, the SEC also proposed certain related amendments to Rule 204-2 under the Advisers Act and Form ADV.

Proposed Rule 206(4)-11 (Proposed Rule) would require investment advisers to conduct due diligence prior to engaging a service provider to perform certain services or functions. It would further require advisers to periodically monitor the performance and reassess the retention of the service provider in accordance with due diligence requirements to reasonably determine that it is appropriate to continue to outsource those services or functions to that service provider.