The SEC staff’s recent guidance on robo-advisers is the most comprehensive SEC guidance to date concerning the considerations robo-advisers should keep in mind in meeting their legal obligations under the Advisers Act. The staff notes that robo-advisers, like all registered investment advisers, are subject to the substantive and fiduciary obligations of the Advisers Act. The staff further indicates that because robo-advisers rely on algorithms, provide advisory services over the internet, and may offer limited, if any, direct human interaction to their clients, their unique business models may raise certain considerations when seeking to comply with the Advisers Act.
Category Archives: Regulatory
Not Throwing Away Your Shot: Relying on Compliance Consultants to Defend Regulatory Actions
You are a CCO responsible for completing and filing Form ADV. You hire a compliance consultant to advise you on what information to include. You act in accordance with that advice, but you later find out that the SEC has instituted a proceeding against you and the firm due to the firm’s inadequate disclosures.
- So, what now?
- How do you defend yourself and the firm in this proceeding?
- Is reliance on compliance consultants an available defense?
- Will that succeed?
Who lives, who dies, and who tells your story (as Alexander Hamilton might say)?
Additional contributor to this post:
Analysis of FINRA Cases Shows Record-Breaking 2016
Eversheds Sutherland (US) LLP has completed its annual study of the disciplinary actions reported by FINRA in 2016. Key takeaways:
- In 2016, the amount of fines ordered by FINRA shattered its previous record set in 2014
- While the number of cases reported was on par with prior years, the amount of restitution declined significantly from 2015’s record total
- Top enforcement issues and emerging trends for FINRA
Additional contributor to this post:
Brian L. Rubin, brianrubin@eversheds-sutherland.com
TIC Form SHC 5-Year Benchmark Survey of U.S. Ownership of Foreign Securities: Due March 3, 2017
Shortening the Settlement Cycle
In 2017, broker-dealers will be required to devote significant time and attention to preparing for a shortened settlement cycle. As a means of reducing credit risk, counterparty risk and overall systemic risk, the Securities and Exchange Commission (SEC) has moved forward with proposed rules that would amend Rule 15c6-1(a) in order to reduce the settlement cycle to two business days (T+2).