Although many investment adviser firms desire to outsource the chief compliance officer role to an unaffiliated third-party independent contractor (“Outsourced CCO”), such an arrangement will be scrutinized and could be challenged by the securities regulator as a violation Rule 206(4)-7 or equivalent rule of the state securities regulator depending upon the facts and circumstances.
Category Archives: SEC
SEC Raises Qualified Client Threshold
September 08, 2021
The U.S. Securities and Exchange Commission (“SEC”) recently finalized revisions to Rule 205-3 under the Investment Advisers Act of 1940, raising the net worth requirements for individuals who are charged performance fees. The SEC increased the threshold requirements for “qualified clients” to account for inflation, as required by the Dodd-Frank Act and section 205(e) of the Advisers Act. The next adjustment for inflation is anticipated in 2026.
Upcoming Webinar – Compliance Risks of Using Wrap-Fee Program
September 03, 2021
On Thursday, September 30, 2021 at 12:00 PM CST, RIA Compliance Consultants will present a live compliance training webinar about the Compliance Risks of Using Wrap-Fee Program. During this webinar our Senior Compliance Consultants will discuss the Division of Examinations (the “Division”) of the U.S. Securities and Exchange Commission (“SEC”) Wrap-Fee Risk Alert about its assessment of investment adviser firms associated with wrap fee programs.
SEC Charges 21 Investment Adviser Firms for Form ADV Part 3 Filing and Delivery Failures
August 02, 2021
The SEC fines Investment Advisers for failing to deliver and file Form CRS, also known as Form ADV Part 3
On July 26, 2021, the Securities and Exchange Commission (“SEC”) announced that 21 investment advisers agreed to settle charges that they failed to file and deliver their CRS Relationship Summary, also known as Form ADV Part 3, to their retail investors. Click here to read the SEC’s full announcement.
SEC Risk Alert – Wrap Fee Programs
July 26, 2021
SEC Risk Alert on Use of Wrap Fee Accounts by Investment Advisers
On July 21, 2021, the Division of Examinations (the “Division”) of the U.S. Securities and Exchange Commission (“SEC”) released a Risk Alert about its assessment of investment adviser firms associated with wrap fee programs.
The SEC identified multiple areas where the investment advisers examined were deficient in their policies, procedures, and practices related to wrap fee programs, and further noted a range of industry practices that investment advisers might consider adopting to meet their fiduciary duty when recommending and managing wrap fee programs.
New Sample Form – SEC Exam – Privilege Log
May 18, 2021
RIA Compliance Consultants recently created a new sample form, SEC Exam – Privilege Log.
The U.S. Securities and Exchange Commission (“SEC”) recently announced that during the first half of fiscal year 2021, the SEC has already exceeded previous fiscal year’s record for individual whistleblower awards. Click here for the SEC’s press release.
Texas Securities Board Amends Rules to Harmonize with SEC’s New Accredited Investor Definition
March 29, 2021
On March 21, 2021, the Texas Securities Board adopted several amendments to its rules and regulations for registered investment advisers and other financial institutions, intended to harmonize the state’s rules with the amended definitions of accredited investor and qualified institutional buyer implemented by the Securities and Exchange Commission (“SEC”) in December 2020. Concurrently, the Texas Securities Board adopted additional amendments which affect broker dealers and other financial institutions other than registered investment advisers. A summary of the most recent changes adopted by the Texas Securities Board is available here.
SEC Announces 2021 Examination Priorities for RIAs
March 15, 2021
On March 3, 2021, the Division of Examinations (formerly known as the “Office of Compliance Inspections and Examinations”) of the U.S. Securities and Exchange Commission (“SEC”) released its 2021 Examination Priorities, an annual report discussing the Division of Examination’s areas of focus including investment advisers registered with the SEC (“RIAs”) for the coming year. In this report, the Division of Examinations (“Division”) noted that it intends to continue to prioritize examinations of SEC registered investment advisers, broker-dealers, and dually registered or affiliated firms, particularly those that have never been examined or have not been examined recently. In doing so, the Division will emphasize protection of retail investors and those saving for retirement.
