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Your professionally curated research and reference resource fully integrating treatise and how-to guidance with underlying laws, rules, interpretations, and hundreds of sample documents.

New Marketing Rule Effective

The new marketing rule became effective on May 4. However, there is an 18 month transition period. So the drop dead compliance date is Nov. 4, 2022 Please refer to our collection of materials on the new rule in the adjoining News column for more information.

Adviser Regulatory & Compliance News

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Division of Examinations Observations: Investment Advisers’ Fee Calculations

November 16, 2021

This seems like an issue that never dies: advisers just can't calculate fees correctly! On Nov. 10, the SEC published a Risk Alert highlighting its findings from 130 examinations of advisers re: fee calculations. Briefly, the key deficiencies observed included: (1) advisory fee calculation errors, such as over-billing of advisory fees, inaccurate calculations of tiered or breakpoint fees, and inaccurate calculations due to incorrect householding of accounts; and (2) not crediting certain fees due to clients, such as prepaid fees for terminated accounts or pro-rated fees for on-boarding clients. In addition, the staff observed fee-related compliance and disclosure issues. The SEC specifically notes that this Risk Alert updates an earlier Alert (from 2018) and provides guidance on how advisers can improve compliance. Please click the headline to this summary to access the Risk Alert.

Robo-advisers flagged for multiple regulatory and compliance weaknesses

November 15, 2021

In mid-November, the SEC published a lengthy Risk Alert highlighting its findings from recent examinations of a variety of advisers providing electronic investment advice ('Robo-advisers"). The Alert notes that almost every adviser examined by the SEC was cited for deficiencies. Notably such deficiencies included, (1) weak compliance programs, including policies, procedures, and testing; (2) deficient portfolio management, including, but not limited to, an adviser’s fiduciary obligation to provide advice that is in each client’s best interest; and (3) marketing/performance advertising, including misleading statements and missing or inadequate disclosure. The Risk Alert provides guidance on the steps Robo-advisers can take to assure compliance. Please refer to the Risk Alert by clicking the headline to this summary.

Observations from Examinations in the Registered Investment Company Initiatives

November 1, 2021

In late October the SEC published a Risk Alert highlighting its findings from examinations of mutual funds, ETFs, and their advisers during 2018-2020. Over 100 advisers were included in the examinations. The examinations focused on aspects of funds and advisers' management that impacted retail investors. Numerous deficiencies and weaknesses were found in the industry and highlighted in the Risk Alert. Key issues identified: weak compliance programs with multiple aspects of fund operations and management; issues with fund board oversight; and the fact that funds had inaccurate, incomplete and/or omitted disclosures in their filings and advertising/marketing. The SEC Staff provide guidance on how funds and advisers can improve compliance in the Alert, which is accessible by clicking the link in the headline to this summary.

Digital Assets Terminology Summary

October 21, 2021

The Cole Schotz law firm published a really helpful summary of key terms used re: digital assets. Please click the headline to this blurb to access the summary.

Upcoming Events

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