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Adviser Regulatory & Compliance News

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SEC to Hold Event About Reg BI and Form CRS

October 24, 2020

The SEC will host a roundtable where Commission staff and FINRA will discuss initial observations on Regulation Best Interest and Form CRS implementation. The event will be webcast to the public. No registration or pre-registration is required.

SEC Relaxes Auditor Independence Rules

October 16, 2020

The SEC amended auditor independence requirements in Rule 2-01 of Regulation S-X. The amendments relax the rules requiring auditor independence. According to the SEC, the rules were amended to focus on relationships and services that are more likely to jeopardize the objectivity and impartiality of auditors.

Fund of Funds Rule Adopted

October 7, 2020

The SEC adopted Rule 12d1-4 under the Investment Company Act and several related amendments that will streamline how fund of funds arrangements are regulated. The modified restrictions are designed to prevent fund of funds arrangements that allow the acquiring fund to control the assets of the acquired fund and use those assets to enrich the acquiring fund at the expense of acquired fund shareholders.

Index Provider Personnel Charged with Insider Trading

September 21, 2020

The SEC brought an enforcement action against Yinghang “James” Yang, a senior index manager at a globally recognized index provider, and his friend Yuanbiao Chen, a manager at a sushi restaurant, with perpetrating an insider-trading scheme that generated more than $900,000 in illegal profits. The SEC alleges that between June and October of 2019, Yang and Chen repeatedly purchased call or put options of publicly traded companies hours before public announcements that those companies would be added to or removed from a popular stock market index that Yang helped his employer manage. When the options increased in value after the announcements, Yang and Chen allegedly liquidated their options positions for a substantial profit. The SEC stated that Yang and Chen conducted all of the illegal trading in Chen’s brokerage account, which allowed Yang to conceal his trading from his employer.

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