On May 18, 2021, South Carolina enacted new legislation intended to help investment advisers and broker-dealers protect clients who are vulnerable adults (such as seniors with diminished capacity) from financial exploitation. Similar to financial exploitation laws adopted by other states, South Carolina’s new law permits state registered investment advisers and broker-dealers to delay disbursements and transactions under specified, limited circumstances for a vulnerable client who is an “eligible adult” as defined by the statute. In addition, a registered investment adviser firm may contact other third parties previously designated by the vulnerable client, such as a trusted emergency contact, regarding the suspected financial exploitation. Firms are also permitted to report suspected financial exploitation to South Carolina’s Adult Protective Services and Securities Division on a voluntary basis. In the event that an investment adviser firm delays a transaction or disbursement, reporting to the specified agencies is mandatory. Click here to read South Carolina’s new financial exploitation law.
South Carolina Registered Investment Adviser’s Deadline to Submit their Written Policies and Procedures Manuals
July 24, 2014
The U.S. Securities and Exchange Commission (“SEC”) has a long-standing rule requiring registered investment advisers to develop, maintain and periodically assess written compliance policies and procedures. A majority of state securities regulators also require state registered investment advisers to develop written compliance and supervisory procedures. For example, South Carolina is one of the many states that requires its state registered investment advisers to develop a written compliance manual. South Carolina makes this explicit through the South Carolina Uniform Securities Act Regulation 13-408(A)(19), which is found under the subheading “Record Requirements of Registered Investment Advisers.” This regulation requires a state registered investment advisers to have “…written procedures to supervise the activities of employees and investment adviser representatives that are reasonably designed to achieve compliance with applicable securities laws and regulations.”