Today, the U.S. Securities and Exchange Commission (SEC) released its July 2008 ComplianceAlert letter which identifies and describes common deficiencies and weaknesses that SEC examiners have found during compliance examinations of SEC registered investment advisers/mutual funds, broker-dealers, and transfer agents. The release, which is considered official comment from the SEC’s Office of Compliance Inspections and Examinations and other select SEC department staff, provides valuable guidance for registered investment advisors trying to navigate the regulatory maze. In the release, the SEC provides guidance on four major areas: (1) personal trading by advisory staff; (2) proxy voting and funds’ use of proxy voting services; (3) valuation and liquidity issues in high yield municipal bond funds; and (4) soft dollar practices of investment advisors.
August 22, 2006
Late last month, the SEC issued its most recent interpretation concerning Section 28(e) of the Securities and Exchange Act of 1934, which is better known as the soft dollar safe harbor. The SEC is also soliciting further comments on Section 28(e). As the interpretation released by the SEC points out, soft dollar arrangements have historically been, and will continue to be, a hot topic with regulators. Soft dollar arrangements are viewed as arrangements under which products or services other than execution of securities transactions are obtained by an advisor from or through a broker/dealer in exchange for the direction of client brokerage transactions to the broker/dealer.