Category Archives: Compliance

SEC Staff Proposes Rules on Streamlining Private Exemptions

March 23, 2020 Clifford E. Kirsch, Editor Leave a comment

On March 4, 2020, the Securities and Exchange Commission (the SEC) issued a proposed rule on ways to simplify, harmonize and improve certain aspects of the exempt offering framework to promote capital formation while preserving important investor protections.

The Proposed Rule is substantially informed by public input that was provided in response to the SEC’s June 2019 concept release on the harmonization of securities offering exemptions.
The goal of the Proposed Rule is to reduce the unnecessary complexity within the offering framework and to allow market participants to navigate through the exempt offering framework more easily.
The changes outlined in the Proposed Rule could bring a wider variety of investors and distribution channels back into the market for issuers, including for BDCs, and such expansion would increase the availability of capital and allow more flexibility for BDC fundraising activities.

SEC relief for advisers impacted by COVID-19

March 17, 2020 Clifford E. Kirsch, Editor Leave a comment

On March 13, 2020, the Securities and Exchange Commission (SEC) issued a temporary order (the Order) providing conditional exemptive relief to investment advisers registered with the SEC (RIAs) and exempt reporting advisers (ERAs) with respect to certain filing, delivery and reporting requirements under the Investment Advisers Act of 1940, as amended (the Advisers Act) due to disruptions and limitations caused by coronavirus disease 2019 (COVID-19). The Order provides impacted firms with conditional exemptive relief from these filing, delivery and reporting requirements in the form of an extension of up to 45 days from the originally required due date. RIAs or ERAs with filing, delivery or reporting obligations between March 13, 2020, and April 30, 2020 (the Period) may rely on the Order. The SEC noted it may extend the Order past April 30 and may issue other relief if warranted in the future.

To rely on the Order, RIAs and ERAs must satisfy the Order’s specified conditions. Detailed here.

Compliance, Enforcement, International, Regulatory

The OCC’s 2019 annual report addresses anti-money laundering risks for financial institutions

January 21, 2020 Clifford E. Kirsch, Editor Leave a comment

The Annual Report summarizes the OCC developments against its 2019 strategic priorities, including its priority to reduce the burden of Bank Secrecy Act (BSA) and Anti Money Laundering (AML) compliance while protecting the financial system.

In 2019, the OCC, along with the other federal financial regulatory agencies, issued interpretive guidance statements on using collaborative arrangements to share resources to manage BSA/AML obligations, considering innovative technologies to meet BSA/AML compliance obligations, clarifying existing risk-focused approaches to examinations of financial institutions’ BSA/AML compliance programs, and clarifying suspicious activity report (SAR) filing requirements for banks providing financial services to hemp-related businesses.

The OCC appears very focused on encouraging banks to adopt innovative technologies to manage their BSA/AML compliance risks, and this trend should continue in 2020 as technological solutions evolve even further.

FINRA 2.0: FINRA Releases Its 2020 Risk Monitoring and Examination Priorities

January 17, 2020 Cheryl L. Haas Leave a comment

FINRA’s examination program has undergone its most significant reorganization in decades. As stated in this press release, FINRA’s goal for the reorganization was to “consolidate its Examination and Risk Monitoring Programs, integrating three separate programs into a single, unified program to drive more effective oversight and greater consistency, eliminate duplication and create a single point of accountability for the examination of firms.” The new look of the examination program was released, along with new management, on Dec. 12, 2019.

For 2020, FINRA is prioritizing risk monitoring, surveillance, and examination programs to further its mission of investor protection and market integrity. The examination priorities are organized around four themes, which build on FINRA’s priorities from prior years: Sales practice and supervision; Market integrity; Financial management; and Firm operations.