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Adviser Regulatory & Compliance News

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Report Released on Investor Testing of the Proposed Relationship Summary for Advisers and Brokers

November 14, 2018

Continuing efforts to enhance investor understanding of adviser and broker services, the SEC’s Office of the Investor Advocate recently made available a report on investor testing conducted by the RAND Corporation. The investor testing gathered feedback on a sample Relationship Summary issued in April 2018 as part of a package of proposed rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers. Results were clear: investors still don't really understand their relationship (fiduciary or otherwise) with advisers and brokers.....“Based on my discussions with many retail investors over the last several months, it is clear to me that too many retail investors are not aware of the material aspects of their relationships with their investment professionals,” said SEC Chairman Jay Clayton.The report is available for review and comment on the SEC’s website: simply click on the heading to this blog posting.

New SEC Risk Alert: Investment Adviser Compliance Issues Related to the Cash Solicitation Rule

November 4, 2018

Just in time for Halloween the SEC revealed the spooky realities of widespread non-compliance by advisers wit the cash solicitations rule, Rule 206(4)-3 under the Advisers Act. Based on a survey of the past 3 years of examination experience and resulting deficiency letters, the SEC issued a Risk Alert. the Alert identifies the most common weaknesses and issues, including failures to: (i) ensure that third party solicitors provide adequate disclosure documents to clients; (ii) receive a timely signed and dated client acknowledgement of receipt of the adviser brochure and the solicitor disclosure document; (iii) execute required agreements with third party solicitors; and (iv) conduct adequate due diligence to determine whether solicitors complied with agreements. The complete Risk Alert can be accessed by clicking the heading to this blog posting.

Social Media Compliance Guide

October 22, 2018

The law firm Mayer Brown recently published an excellent and comprehensive Social Media Compliance Guide for Issuers, Brokers and Advisers. This is a really helpful publication and can be accessed by clicking the heading to this blog post.

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