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.
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.
March 22, 2021
On March 5, 2021, the U.S. Securities and Exchange Commission (“SEC”) added three new questions and answers to its website page with Frequently Asked Questions (“FAQs”) on the Form CRS/Form ADV Part 3 for SEC registered investment adviser serving retail investors. The first new Q&A addresses situations in which an investment adviser or broker dealer with a Form CRS/Form ADV Part 3 filing obligation is dually registered or affiliated with a firm that does not have a Form ADV Part 3/Form CRS filing obligation. The second and third Q&A clarify when and how an SEC-registered investment adviser or broker dealer must file and disseminate the Form ADV Part 3/Form CRS (also referred to as a “relationship summary”) if material and/or nonmaterial changes have occurred.
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.
February 27, 2021
SEC Risk Alert
SEC Brings Enforcement Action Against RIA for Allegedly Failing to Disclose Adverse Info About Promissory Notes Issuer
February 07, 2021
The U.S. Securities and Exchange Commission (“SEC”) recently instituted a cease-and-desist proceeding against an SEC registered investment adviser firm and its principal for failure to disclose material information to a client regarding promissory notes issued by a third-party, which eventually was charged in June 2018 by the SEC with an offering fraud and placed under receivership in December 2018. Click here to view the SEC order in this matter; the following is a summary of the SEC’s allegations in this matter, RIA Compliance Consultants, Inc. has not verified the accuracy of such allegations.
On December 22, 2020, the U.S. Securities and Exchange Commission (“SEC”) announced it has adopted amendments (also known as the “marketing rule”) to its rules under the Investment Advisers Act of 1940 (“Advisers Act”) that govern advertising and cash solicitation activities by investment advisers registered with the SEC. Unlike the proposed amendments, the SEC’s finalized marketing rule addresses both advertising and soliciting under a single rule. Click here to read the SEC’s final rule release for this new marketing rule for investment advisers.
On December 16 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 and broker dealers with regard to Rule 13h-1, which was adopted to help the SEC identify and obtain information on certain market participants (referred to as “Large Traders”) that conduct a substantial amount of trading activity as measured by volume or market value, in national market system (“NMS”) securities. In the Risk Alert, OCIE noted that some advisers and broker dealers it examined were unaware of the rule or its specific requirements and, consequently, is encouraging all SEC-registered investment advisers and broker-dealers to review and update their compliance policies and procedures, as needed, to ensure compliance with Rule 13h-1. Click here to read the SEC’s Risk Alert for Large Trader Obligations.
December 17, 2020
On November 19th 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 with regard to SEC Rule 206(4)-7 (the “Compliance Rule”) under the Investment Advisers Act of 1940. In its Risk Alert, the SEC noted that Compliance Rule deficiencies are among the most common discovered by OCIE during SEC registered investment adviser examinations. Click here to read the SEC’s Risk Alert for Investment Adviser Compliance Programs.