While completing the annual review of its compliance program, an investment adviser should update its self-identification of the risks facing the firm.
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SEC Risk Alert – Investment Adviser Firms with Multiple Branch Offices
November 23, 2020
On November 9 2020, the Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) released a Risk Alert about its assessment of the compliance practices of SEC-registered investment advisers that have multiple branch offices. In its Risk Alert, the SEC noted that its Multi-Branch Initiative (“Initiative”) focused on investment advisers practices relating to compliance programs and supervision, with a particular focus on the Code of Ethics Rule, Custody Rule, and fiduciary obligations relating to fees, expenses, and advertising. The SEC also evaluated how supervised persons at branch locations provided investment advice, focusing on oversight of investment recommendations, management and disclosure of conflicts of interest, and allocation of investment opportunities.
Preliminary Renewal Statement Now Available
November 18, 2020
As of Monday, November 16, 2020, your investment advisor firm can access, via its IARD account, its Preliminary Renewal Statement for the upcoming year. Investment advisor firms are assessed individual registration fees based on the state(s) that the firm is notice filed or registered in and the number of investment advisor representatives and their approved registration statuses. The amount reflected in the Preliminary Renewal Statement is the amount of renewal fees investment advisors must pay in order to maintain active registration for the firm and its investment advisor representatives.
Preliminary Renewal Statements Available Monday
November 12, 2020
SEC Roundtable on Regulation Best Interest and Form CRS
November 10, 2020
On October 26, 2020, the United States Securities and Exchange Commission (“SEC”) hosted an online roundtable discussion on Regulation Best Interest and Form CRS, with contributions from senior staff at the SEC and the Financial Industry Regulatory Authority (“FINRA”). Divided into two panels, the online roundtable focused on issues and observations made by SEC and FINRA staff (referred to collectively here as “the staff”) regarding Regulation Best Interest and Form CRS. To view the archived webcast, click here.
SEC Issues Joint Statement on New FAQs Focusing on Disciplinary Disclosures for Form CRS/Form ADV Part 3
November 02, 2020
On October 8, 2020, the United States Securities and Exchange Commission (“SEC”) issued a new joint statement from Chairman Jay Clayton, Dalia Blass, Director of the Division of Investment Management, and Brett Redfearn, Director of the Division of Trading and Markets regarding the Form ADV Part 3. In the statement, the SEC Chairman and Directors discussed the importance for investment adviser and broker dealer firms to clearly and succinctly make required disciplinary disclosures in the Form CRS/Form ADV Part 3. The statement highlighted the publication of several new FAQs for the Form CRS/Form ADV Part 3, which are now available here. To read the SEC’s joint statement, click here.
Failure to Properly Renew Registration May Result in Adverse Consequences for Investment Advisers
October 28, 2020
Investment adviser firms and investment adviser representatives must maintain active registrations and/or notice filing statuses with applicable jurisdictions/states. Unless properly renewed, all investment adviser firm and investment adviser representative licensing approvals expire December 31 each calendar year. To ensure that investment adviser firms and their investment adviser representatives are properly licensed in all necessary jurisdictions for 2021, renewal fees must be paid through the Investment Adviser Registration Depository (“IARD”) system.
Recorded Webinar – Best Practices to Reduce the Risks of Arbitration and Litigation
October 27, 2020
Best Practices to Reduce the Risk of Arbitration and Litigation
Investment Advisers Should Begin Preparations for 2021 Renewals
October 14, 2020
As annual renewal season rapidly approaches, investment advisers should be proactive and begin preparing for renewals by reviewing to make sure the investment adviser is properly registered or notice filed, as applicable, and that its investment adviser representatives are properly licensed with all required state securities regulators. The IARD Renewal Program serves to facilitate the annual renewal of investment advisers and their investment adviser representatives’ registrations with the appropriate state securities regulators. Although, an investment adviser’s registration, notice filing, and licensing requirements are some things that should be reviewed and monitored on an ongoing basis, during the annual renewal process all investment advisers should review their existing registration or notice filing status and each investment adviser representative’s licensing status to confirm that the investment adviser and its representatives are properly registered, notice filed, or licensed (as applicable). Additionally, all state registered investment advisers should also review the state requirements to see if branch office registration is required and, if it is, investment advisers should confirm that all branch office locations have been properly registered.
SEC Charges Investment Adviser Rep with Cherry Picking Profitable Trades for Personal Account
October 12, 2020
On September 28, 2020, the U.S. Securities and Exchange Commission (“SEC”) filed a complaint against an investment adviser representative located in Nebraska for allegedly cherry picking profitable trades for his personal investment account, while disproportionately assigning unprofitable trades to investment advisory client accounts. During the alleged scheme, which ran from January 2017 to March 2018, the SEC asserts that the investment adviser representative earned a 4.4% return on his personal investment account while his disfavored clients earned a negative 12.56% return. Click here to read the SEC’s complaint.
