IARD User Fees
IARD user fees are always a source of confusion. That is because advisers swear up and down that they paid their renewal fees and this additional fee must be a mistake. But IARD user fees are separate and apart from … Continued
New Private Equity Registration Exemption??
The U.S. House of Representatives is expected to vote on legislation that would exempt certain private equity fund advisers from U.S. Securities and Exchange Commission (“SEC”) registration and reporting rules. The Dodd-Frank Act significantly changed the adviser registration requirements. As … Continued
Policy Statement on Custody Requirements
In conjunction with the release of a preliminary report describing an initiative by the Registration, Inspections, Compliance and Examinations Section of the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth (the “Division”) to examine advisers that registered with … Continued
SEC Examiner Faces Criminal Charges
From the Financial Times: A veteran examiner with the Securities and Exchange Commission faces criminal charges for filing false government ethics forms over his ownership of bank stocks in violation of agency rules. Steven Gilchrist, a SEC examiner since 1996, … Continued
SEC Advisers to Pay User Fees?
The recommendation of the Investor as Purchaser Subcommittee: “The SEC should request legislation from Congress that would authorize its Office of Compliance, Inspections, and Examinations (OCIE) to impose “user fees” on SEC-registered investment advisers, the revenue from which could be … Continued
Undisclosed Principal Transactions
The SEC recently announced charges against two Houston-based investment advisory firms and three executives for engineering thousands of principal transactions through their affiliated brokerage firm without informing their clients. In a principal transaction, an investment adviser acting for its own … Continued
SEC Examines Only 8% of Advisers
During Fiscal Year 2012, despite improved risk-based analysis to select examination candidates in its examination program, the SEC was able to conduct on-site examinations of only about eight percent of registered investment advisers. Over 40 percent of SEC-registered investment advisers … Continued
Investment Adviser Examination Improvement Act of 2013
The goal of this legislation is to amend the Investment Advisers Act of 1940 to require certain investment advisers to pay fees to help cover the costs of inspecting and examining investment advisers under the Advisers Act.
Year-End Compliance Checklist
Dear Compliance Professional, There are a few compliance actions that all investment advisers can benefit from undertaking at this time of year. Some obvious, some not so obvious. All important. So, without further ado, here is our end-of-the year checklist: … Continued
Minnesota IARs of SEC Firms Now Required To Register
Prior to now, investment adviser representatives of SEC-registered investment advisers that were located in Minnesota did not have to register with state regulators (unless that had an office in the state). An Order dated October 31, 2013, has been issued by the Minnesota … Continued
No Firm Too Small to Escape SEC Scrutiny
Mary Jo White, the SEC Chairperson, stated this past week that strong enforcement by the SEC is “absolutely critical” to market integrity and that the SEC would have zero tolerance for misconduct. White said that the SEC would not ignore small violators … Continued
SEC Poised for Massive Audit of Hedge Funds
The U.S. hedge fund industry will be deluged with on-site examinations over the next three years, as the Securities and Exchange Commission broadens its oversight of this sector with a focus on strategy, valuation processes and “side pockets,” a leading … Continued
Deferred Prosecution
The SEC entered into its first deferred prosecution agreement with an individual. The agreement was with Scott Herckis, former administrator to hedge fund Heppelwhite Fund LP. It recognizes his timely and significant contributions to the SEC’s efforts to halt an … Continued
Aggregation of Certain Client Assets in Private Funds
The SEC’s Division of Investment Management said, in a Guidance Update published this week, that it would not object if related investment advisors registered jointly with the SEC and operating a single advisory business aggregate investments made by certain investors for purposes of … Continued
Annual Registration Renewal Starts Tomorrow
Tomorrow starts the registration renewal period. You need to log on to your IARD account and get a copy of your Preliminary Renewal Statement. Payment is due by December 13th, but we suggest paying well in advance. You have your … Continued
The SEC Speaks (and Speaks)
Dear Compliance Professional, In recent weeks SEC officials have been quite chatty. What differentiates these recent pronouncements from the SEC’s usual speechifying is that the recent stuff contains a trove of useful compliance insights. This Compliance Newsletter summarizes what advisers … Continued
Mary Jo White
There is an interesting profile in the New Yorker magazine of the Chair of the SEC. You can find the article here: “Street Cop“
SEC Exam Initiative
SEC inspections chief Andrew Bowden revealed that next year, the SEC plans to target those advisers who have never undergone a compliance examination. Particularly those advisers that have been registered for more than three years and have never faced an … Continued
Enforcement Report
An enforcement report from the North American Securities Association slated for release this Thursday (November 7, 2013) finds the following deficiencies among mid-sized firms that made the switch from SEC to State registration: Unlicensed investment adviser representatives; Failing to document … Continued
SAC To Pay $1.8 Billion Fine
SAC Capital Advisors, once among the world’s most successful hedge funds, has agreed to close its doors to outside investors and pay a record-setting $1.8 billion to settle charges that it engaged in inside trading as far back as 1999. … Continued