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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.

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Adviser Regulatory & Compliance News

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Disclosure in the Time of Covid-19

May 9, 2020

The SEC has released some guidance to various types of registrants regarding their disclosure requirements in this pandemic. A recent article by the VedderPrice law firm provides sound overall guidance. Specifically, the article examines SEC enforcement practices in light of crisis events, and notes that "On April 2, 2020, SEC Chairman Jay Clayton released a statement that noted, in relevant part, that he 'expect[s] the Commission and the staff will take the firm-specific effects of such unforeseen circumstances (and related operational constraints and resource needs) into account in our examination and enforcement efforts.' This does not mean that litigation and investigations won’t be commenced in the first place. It does, however, suggest that registrants who are able to demonstrate that their actions during this challenging time were risk appropriate and disclosure-consistent may be in the best position to argue that investor losses were the result of a truly novel pandemic, as opposed to registrant wrongdoing." Our thought is that this applies to advisers as much as to public companies and funds. Please click the heading to this summary to access the VedderPrice article.

Form CRS Sample

May 8, 2020

In the spring of 2020, registrants are beginning to file Form CRS, Client Relationship Summaries. Attached is one of the first we've been able to retrieve. However, no assessment of quality or compliance is made. Please click the headline to this summary to connect to the site.

SEC Coronavirus (COVID-19) Response—Update May 5, 2020

May 6, 2020

On May 5, 2020 the SEC published an update and summary of the actions taken to date to address the challenges of the Covid-19 pandemic. Notably the SEC stated that it is focused on " >maintaining the continuity of Commission operations; >monitoring market functions and system risks; >providing prompt, targeted regulatory relief and guidance to issuers, investment advisers and other registrants impacted by COVID-19 to facilitate continuing operations, including in connection with the execution of their business continuity plans (BCPs); and >maintaining our enforcement and investor protection efforts, particularly with regard to the protection of our critical market systems and our most vulnerable investors." Please click the headline to this summary to access the SEC's announcement and its summary of actions taken.

Fair Valuation Rule Proposed

April 24, 2020

In late April, the SEC finally proposed a rule permitting fund boards, or alternatively Valuation Committees of the boards, to delegate fair valuation of securities to fund advisers. Proposed Rule 2a-5 under the '40 Act would replace existing guidance. Key proposed provisions include: 1. Fund board or valuation committee may formally delegate fair value determinations to the fund's investment adviser 2. The investment adviser would be subject to board oversight and must make detail reporting, recordkeeping and meet other requirements to facilitate oversight by the board 3. Rule will prescribe detailed requirements for determining fair values 4. Rule will define the criteria for what makes a market quotation "readily available," which has been an on-going problem as it is currently undefined by the '40 Act and rules thereunder Comments on the proposal are due July 21, 2020. The link to the proposed rule is imbedded in the headline to this summary. Please click the headline.

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