ComplianceAlert

SEC Modernizes Advertising Rule

Last month, the SEC voted to adopt new Rule 206(4)-1 (“Advertising Rule” or “Rule”) under the Advisers Act, which updated the Rule and merged it with the Cash Solicitation Rule, 206(4)-3. This effectively rescinded Rule 206(4)-3. The new Rule is principle-based and replaces many of the SEC No-Action Letters that the industry has relied upon…

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ComplianceAlert

SEC Modernizes IC Act Senior Securities Rule

When the SEC voted last month to adopt new Rule 18f-4 under the Investment Company Act of 1940 (“IC Act” or the “Act”), it permitted the greater use of derivatives by certain registered investment companies. The new rule covers mutual funds (excluding money market funds), ETFs, closed-end funds, and business development companies (BDCs). Derivative use…

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ComplianceAlert

OCIE Details Rule 206(4)-7 Deficiencies

On November 19, 2020, the Office of Compliance Inspections and Examinations (OCIE) issued a Risk Alert (the “Alert”) on observed deficiencies related to Rule 206(4)-7 (the “Compliance Rule”). In the Alert, OCIE cites notable deficiencies or weaknesses culled from a sample of deficiency letters following recent investment adviser exams. Compliance Rule deficiencies have been among…

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ComplianceAlert

New Rule Finalized for Fund of Funds

Earlier this month, the SEC lifted investment restrictions on fund of funds (FOFs) by adopting new Rule 12d1-4 (the “Rule”) under the Investment Company Act of 1940 (the “Act”). The new Rule removes certain investment restrictions (subject to conditions), rescinds an existing rule, and eliminates existing exemptive relief. This is good news for registered investment…

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ComplianceAlert

New Cybersecurity Threat Identified by OCIE

The SEC’s Office of Compliance Inspections and Examinations (OCIE) recently issued a Risk Alert (the “Alert”) discussing cybersecurity observations from its examinations over time. The Alert did not state the time period of examinations included; however, OCIE has conducted several cybersecurity targeted exams over recent years. OCIE is concerned with an increase in a particular…

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