Regulatory Compliance Blog

As you may know, the state of Florida has approved an annual continuing education (CE) requirement for all investment advisory representatives (IARs) who are registered in the state.*  This rule was the creation of the North American Securities Administrators Associations (NASAA) in 2022, and since then this model rule has been adopted by 19 states…

On July 20, 2021, we released our Blog entitled “SEC Modernizes a New Marketing Rule” to provide you with a glimpse of things to come pertaining to new marketing and advertising definitions, prohibitions, amendments and SEC staff guidance set forth by the new Marketing Rule (the “Rule”).  The Rule had an effective date of May…

Authors: Greg Reymann & Jim Obuchi On Tuesday, April 26th, the SEC’s Division of Examinations (the “Division”) issued a Risk Alert that outlined notable deficiencies observed by the Division’s staff with respect to two key compliance areas: Section 204A of the Advisers Act of 1940, which addresses the prevention of the misuse of material non-public…

Authors: Greg Reymann and Jim Obuchi On Wednesday, March 30th, the SEC’s Division of Examinations (the “Division”) released its annual examination priorities for 2022, which cited a 20% increase in the number of RIAs over the past five years (from about 12,250 to over 14,800 RIAs). During this period, the number of RIAs with AUM…

Authors:  Lisa M. Kennerly and Greg Reymann  On December 18, 2020, the Department of Labor (“DOL”) adopted the Prohibited Transaction Exemption 2020-02 (“PTE 2020-02”) in its every-lasting effort to help promote investment advice that is in the best interest of retirement investors. This exemption puts an emphasis on mitigating conflicts of interest and ensuring that…

Authors: Lisa M. Kennerly and Greg Reymann On August 30, 2021, the Securities and Exchange Commission (“SEC”) issued findings and imposed remedial sanctions in three different matters involving violations of cybersecurity policies and procedures, which resulted in the exposure of customer records and information, including personal investment information.   Applicable Rules: The Safeguards Rule of…

Author:  Greg Reymann Recently the SEC’s Division of Examinations (the “DOE” or the ”Staff” ) published a Risk Alert covering wrap fee program sponsored or offered by investment advisers. Wrap fee programs require advisory clients to pay a consolidated fee for investment service and other costs, including commissions, trading fees and administrative costs. As noted…

Authors:  Lisa M. Kennerly, Greg Reymann   On December 22, 2020, the Securities and Exchange Commission (“SEC”) announced that it had modernized the rules that govern investment adviser advertisements and payments to solicitors. The amendments create a single rule that replaces the current advertising rules. As noted by the SEC, the technology used for communications…

Author:  Jim Obuchi Under the Advisers Act, Rule 206(4)-7 requires each registered investment adviser (RIA) to conduct an annual review of its policies and procedures to determine their adequacy and the effectiveness of their implementation. The SEC recommends that the review “consider any compliance matters that arose during the previous year, any changes in the…