New NASAA Report on Diminished Capacity Among Investment Adviser Representatives

August 08, 2020


The North American Securities Administrators Association, Inc. (“NASAA”) recently released a white paper detailing the results of a study conducted by its Senior Issues/Diminished Capacity Committee. While many investment adviser firms are increasingly aware of issues related to diminished capacity in clients, NASAA has found that not all registered investment advisers are prepared to identify and address diminished capacity among investment adviser representatives. As part of the study, NASAA surveyed a number of financial institutions and industry professionals including Bryan Hill, President of RIA Compliance Consultants, Inc.

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SEC Proposed Changes to Form 13F for Institutional Investment Managers

August 03, 2020

On July 10, 2020, the United States Securities and Exchange Commission (“SEC”) announced proposed amendments to the Form 13F reporting threshold for institutional investment managers. Currently, Section 13F requires institutional investment managers, which includes registered investment advisers, to file a report with the SEC if the institutional investment manager exercises investment discretion over accounts holding certain types of equity securities that have an aggregate fair market value of at least $100 million on the last trading day of any month of any calendar year. The threshold has not been updated since the mid-1970s when the Form 13F was first adopted by the SEC.

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Texas State Securities Board – Temporary Office and Work Location Filing Relief Extended

July 27, 2020

The Texas State Securities Board has announced extended relief from certain filing obligations for securities professionals regulated by Texas, including state registered investment advisers and investment adviser representatives. Filers that would otherwise be required to update a filing solely to report a change in the office of employment address of an employee, agent, or representative, or any newly opened temporary branch or office location between March 13, 2020 and September 30, 2020 will not be penalized or sanctioned for not updating a filing to reflect a temporary branch or work location or space-sharing arrangement. When first announced in March 2020, the waiver ended on June 30, 2020.

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SEC Risk Alert – Investment Advisers Managing Private Funds

July 14, 2020

On June 23, 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 that manage private equity funds or hedge funds (“private fund advisers”). In its Risk Alert, the SEC noted that over 36% of SEC registered investment advisers manage private funds, which represent a significant area of investment for pensions, charities, endowments, and others. Click here to read the SEC’s Risk Alert for Private Funds.

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SEC Publishes New Website for Main Street Investors

June 22, 2020

On June 15th, 2020, the United States Securities and Exchange Commission (“SEC”) announced a new website designed for Main Street Investors, intended to help retail investors navigate the new Form CRS/Form ADV Part 3. Published in a “Question and Answer” format, the website explains to retail investors the purpose of the Form CRS/Form ADV Part 3 and describes the information they can expect to find in the Form CRS/Form ADV Part 3. Click here to view the SEC’s new website for Main Street Investors.  As an SEC registered investment adviser firm prepares its Form CRS/Form ADV Part 3 training for its supervised persons, RIA Compliance Consultants recommends that a review of the Main Street Investors website should be included as a component of such compliance training.

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Form CRS/Form ADV Part 3 Testing for Compliance

June 18, 2020

With the fast approaching deadline to file and deliver the new Form CRS/Form ADV Part 3 relationship summary, investment adviser firms registered with the United States Securities and Exchange Commission (“SEC”) must take steps to test their compliance with this Form CRS/Form ADV Part 3 rule. In its recent Risk Alert, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) discussed what SEC registered investment adviser firms can expect from an examination that focuses on Form CRS/Form ADV Part 3 compliance. Click here to read the SEC’s Risk Alert.

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Form ADV Part 3 Conversation Starters

June 16, 2020

The filing and delivery deadline for the new Form CRS/Form ADV Part 3 relationship summary is fast approaching, and many investment adviser firms have not yet prepared the answers for the ADV Part 3 Conversation Starters which are included in the text of a Form ADV Part 3 relationship summary.

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World Elder Abuse Awareness Day – What Investment Advisers Can Do to Protect Vulnerable Clients

June 12, 2020

June 15 is World Elder Abuse Awareness Day (WEAAD). WEAAD was launched by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations. The purpose of WEAAD is to provide an opportunity for communities around the world to promote a better understanding of abuse and neglect of older persons by raising awareness of the cultural, social, economic and demographic processes affecting elder abuse and neglect.

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