On January 4, 2012, the U.S. Securities and Exchange Commission’s (“SEC”) Office of Compliance Inspections and Examinations released a regulatory alert discussing the use of social media by investment advisers.
The U.S. Securities and Exchange Commission (“SEC”) recently issued an Order Instituting Administrative and Cease-and-Desist Proceedings against Calhoun Asset Management, LLC (“Calhoun”) and its principal for, among other things, making false and misleading statements on Calhoun’s Form ADV.
Final Renewal Statements for registered investment advisors are now available in the IARD/Web CRD system. These statements will reflect the final registration statuses of the investment advisor firm and its representatives as of December 31, 2011. Final Renewal Statements will reflect that the investment advisor is “Paid In Full,” has an “Amount Due,” or “Failed to Renew.”
The U.S. Securities and Exchange Commission (“SEC”) has modified the rules used to determine whether an individual is qualified to invest in certain unregistered securities offerings. The amendments were adopted as part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”).
For most registered investment advisers, it is now time to file an amendment to your Form ADV. Pursuant to Rule 204-1 under the Investment Advisers Act of 1940 (“Advisers Act”), all investment advisers registered with the U.S. Securities and Exchange Commission (“SEC”) must file an amendment to the Form ADV at least annually, within 90 days of the investment adviser’s fiscal year end and more frequently if required by the instructions to Form ADV. Most state securities regulators have similar rules and the Form ADV Instructions specifically indicate that the update instructions apply to “SEC and State Registered Advisers.”
Earlier this year, the U.S. Securities and Exchange Commission (“SEC”) adopted rule changes under the Investment Advisers Act of 1940 in order to implement Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act. One of the more significant rule changes impacts all registered investment advisers as it centers on revisions to the Form ADV Part 1. Beginning January 1, 2012, all investment advisers registered with the SEC will have 90 days to complete and submit the revised Form ADV Part 1 confirming their eligibility to remain SEC registered. Investment advsiers registered with the SEC with November, December, January and February fiscal year ends are reminded they must also file their official Form ADV Part 1 Annual Amendment within 90 days of their fiscal year end and will likely choose to file their SEC eligibility amendment and annual amendment in conjunction.
Registered investment adviser may soon be required to monitor client accounts for money laundering activities. James Freis, the director of the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”), recently announced that FinCEN and the U.S. Securities and Exchange Commission (“SEC”) are working together to finalize anti-money laundering regulations that would apply to investment advisers. The proposed rule would likely require investment advisers to implement anti-money laundering policies and procedures and would also require them to report suspicious activity to the appropriate authorities.
In order for an investment adviser to maintain active state registration or notice filing statuses, as well as active state registration statuses for investment adviser representatives licensed under an investment adviser firm, renewal fees must be paid, in full, by all investment advisers by no later than December 12, 2011. Investment advisers need to be sure to allow sufficient time for submitted funds to be processed and reflected in the renewal account; it is highly encouraged that investment advisers submit their renewal payments electronically by no later than December 8, 2011. If renewal fees are submitted by check via the U.S. postal service, the investment adviser must account for delivery and processing time. It is important to remember that failure to pay renewal fees in full and on time may result in the termination of your investment adviser firm and its investment representative’s active registration statuses. Additionally, many jurisdictions also impose fines against investment advisers that fail to renew properly.
For many registered investment advisers, the task of determining ongoing compliance requirements can seem overwhelming. Carrying out an investment adviser’s ongoing compliance duties can be a very manageable process if the investment adviser is aware of its requirements and organizes and assigns responsibilities for the various compliance functions. A compliance calendar can be a valuable tool to assist investment advisers in carrying out their ongoing compliance duties throughout the year. Developing a compliance calendar can help strengthen an investment adviser’s compliance program that must be developed to detect, prevent, and correct possible regulatory violations that can occur throughout the year.
The STOCK Act, a bill that is designed to restrict the ability of elected officials to make securities trades based on non-public inside information, is gaining support in Congress.