The SEC recently released a Risk Alert (“the Alert”) from the Division of Examinations on how it goes about selecting firms for examination. This is a first of its kind Alert since traditionally the Staff has not released its examination strategy and registrant selection process. The Alert even includes a chart that shows the items on its initial document request letter to registered advisers.
The goals of the Division of Examinations are to:
Promote compliance…
The private fund industry has a new compliance hurdle to reach with the SEC’s newly adopted Private Funds Rule (“the Rule”). On August 23, 2023, the Commission voted 3-2, along party lines, to adopt new rules (a total of five) under Section 211(h) of the Advisers Act. The SEC determined that new rules were needed for the private fund industry in order to address:
Lack of transparency in private funds
Conflicts of interest
Lack of…
The SEC continues to be highly active from both an examination and rulemaking perspective. The Division of Examinations (EXAMS) and the Division of Investment Management (IM) continue to work closely together in order to further rein in the asset management industry. In June, EXAMS released another Risk Alert (“the Alert”) related to the revised Marketing Rule, the Spring 2023 SEC Regulatory Agenda was released around the same time, while a new Proxy Voting Rule took…
It appears that the SEC is following through on its promise to crack down on private markets, rolling out its first significant rule changes for private funds. Earlier this month, the Commission adopted new Form PF changes that will affect all private funds required to file the form. As of today, most firms are either filing the form quarterly or annually, depending on asset size. The filing requirements will change under the new amendments. Specifically,…
A new Risk Alert (“the Alert”) focused on branch office supervision and customer data safekeeping has been issued by the Division of Examinations (“EXAMS”). This is the third Alert of 2023, and it discusses Staff findings from examinations conducted on both registered investment advisers and broker-dealers. The SEC discovered issues during these examinations in relation to Reg S-P and customer data. Most weaknesses found were in relation to vendor and technology systems that have access…
