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Adviser Regulatory & Compliance News

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SEC Compliance Outreach Seminar in April

February 14, 2018

The SEC recently announced its 2018 outreach program national seminar for investment companies and investment advisers. The event is intended to help CCOs and other senior personnel at investment companies and investment advisory firms to enhance their compliance programs for the protection of investors. We've been to these in the past and they are invaluable for insights and guidance on the SEC's current regulatory and examination focus points. Please click the heading above to be linked to the announcement and registration pages.

SEC Offers Advisers Potential Amnesty for Self-Reporting of Fund Share Revenue Sharing Violations

February 13, 2018

On Feb. 12, the SEC announced a new initiative designed to encourage advisers to self-report inappropriate mutual fund share class revenue sharing arrangements. These arrangements generally arise when an adviser counsels clients to purchase higher commission or fee producing mutual fund share classes when less costly ones are available. Typically, there is a lapse in disclosure to the client underlying the sale, which can be viewed as fraudulent. According to the SEC press release, "Under the Share Class Selection Disclosure Initiative..., the [Enforcement] Division will agree not to recommend financial penalties against investment advisers who self-report violations of the federal securities laws relating to certain mutual fund share class selection issues and promptly return money to harmed clients." Please click the heading for the full announcement.

Examination Priorities 2018 Released

February 8, 2018

The SEC has released its 2018 exam priorities. The key themes are a continuation of past trends, organized around five themes: 1. Matters of importance to retail investors, including seniors and those saving for retirement; 2. Compliance and risks in critical market infrastructure; 3. Financial Industry Regulatory Authority (FINRA) and Municipal Securities Rulemaking Board (MSRB); 4. Cybersecurity; and 5. Anti-Money laundering programs. See link embedded in the title of this news blurb to link to the full document.

SEC Investor Bulletin: Investment Adviser Sponsored Wrap Fee Programs

January 5, 2018

In early December the SEC published an Investor Bulletin updating and outlining the basics of wrap fee programs from an investor's perspective. The Bulletin is instructive on the SEC's current advice and views of such programs, which are growing rapidly. Notably at the end of the Bulletin the SEC references several key enforcement actions regarding such programs. Click the heading of this blurb for a link to the Bulletin.