Compliance, Enforcement, Regulatory, Standard of Care

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

SEC’s Division of Examinations 2023 Priorities

February 9, 2023 BDIA Editors Leave a comment

The SEC’s Division of Examinations recently released its Examinations Priorities 2023 report. In fiscal year 2022, they examined approximately 15% of the registered investment adviser population, and over 360 broker-dealers examinations, and, together with FINRA, they examined nearly half of the approximately 3,500 registered broker-dealers in fiscal year 2022. They continue to focus on their “four pillars”: (1) promote compliance; (2) prevent fraud; (3) monitor risk; and (4) inform policy.

ACA’s take on the priorities can be found here.

Compliance, Regulatory, Standard of Care

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……