Earlier this month, the NFA issued Interpretive Notice 9074 (the “Notice”) in relation to NFA Compliance Rule 2-9 for CPOs. The Notice pertains to CPOs with control over customer funds and addresses how firms should manage employees and supervise third parties in order to meet the supervisory obligations under the Compliance Rule.
The NFA recognizes the fact that firms vary in size and structure and often report to multiple regulators. A firm’s internal control systems…
What constitutes custody status for registered investment advisers still creates challenges for firms despite the SEC’s best efforts to modify and clarify the rules. Amy Lynch, Founder and President, states that the custody rule is the regulatory issue the SEC has provided the most clarity on. However, she adds that it remains confusing for advisers since the rule contains substantial legalize that may have various interpretations and can therefore lead to rule violations. Recent SEC…
The SEC’s schedule to finalize settlements with firms for Rule 12b-1 violations is feeling the lingering effects of the Federal government shutdown. Founder and President Amy Lynch explains that work remains for the SEC to finalize the settlements and the agency will be pushed to meet its end of February goal. See Fund Intelligence (subscription required), “Shutdown creates uncertainty around timing of 12b-1 settlements”…
With the SEC’s share class sweep now in its later stages, a number of firms are under pressure by the regulator to settle cases. Amy Lynch, FrontLine’s Founder and President, explains that these firms are primarily small and mid-sized shops that feel boxed in to negotiate with the SEC because they lack the deep pockets of larger firms. Many of these firms struggled to recover the historical data requested by the SEC to self-report violations.…
