Tag Archives: SEC
 

Will Your Investment Adviser’s Use of an Outsourced CCO Survive Regulatory Scrutiny?

January 11, 2022

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.

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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.

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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

Seal of the SEC
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.

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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.SEC Building 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.

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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.

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SEC Updates Form ADV Part 3/CRS FAQs for Investment Advisers

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.

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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.

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