The Unchecked Growth and Lack of Responsible Regulation in Digital Assets

Someone recently asked me why the unchecked growth and lack of responsible regulation in the digital asset space bothered me. It was a fair question from someone I respect in the space, so I wanted to take the time to address it. By way of background, I am an asset management attorney. I represent financialContinue reading “The Unchecked Growth and Lack of Responsible Regulation in Digital Assets”

“Qualified Client” Definition Amended to Keep Pace with Inflation

On June 17, 2021, the Commission ordered that Rule 205-3 under the Investment Advisers Act of 1940 be amended so that the term “qualified client” means (i) natural person who, or a company that, immediately after entering into the contract has at least $1,100,000 under the management of the investment adviser; and (ii) a naturalContinue reading ““Qualified Client” Definition Amended to Keep Pace with Inflation”

How Should We Perform an Annual Review Under Rule 206(4)-7?

The most frequent quip I hear from owners and executives of investment advisers relating to compliance is that what keeps them up at night is they “don’t know what they don’t know.” I sympathize with them about the unknown and try and help insure that they are positioned to be compliant with federal and stateContinue reading “How Should We Perform an Annual Review Under Rule 206(4)-7?”

Investment Advisers with Under $100MM in Assets Are Successful Too!

Recently, Bruce Kelly of InvestmentNews published “Advisers, shoot for $100 million in AUM before going indie“. The article summarized a virtual conference panel that InvestmentNews RIA Summit held where the message from most panelists seemed to have suggested that investments advisers starting their business with less than $100 million under management would be better servedContinue reading “Investment Advisers with Under $100MM in Assets Are Successful Too!”

The Problem With Foreign Clients and Clients Residing in Foreign Jurisdictions

One of the most frequently asked questions I receive from investment advisers is whether they can enter into an advisory relationship or manage assets for a client located in a foreign country. Like the United States, foreign jurisdictions have laws that require registration for rendering investment advice to individuals residing within their jurisdiction. This post is intended to provide a bit more context for advisers trying to work through these issues.

Signs You May Want to Reconsider Your Compliance Partner

I have a lot of respect for compliance professionals, Chief Compliance Officers, legal counsel and anyone in a regulated environment that is trying to keep their client out of trouble. At the same time, I occasionally am told stories involving compliance consultants that blow me away. So I decided to compile a list of signsContinue reading “Signs You May Want to Reconsider Your Compliance Partner”

SEC Staff to Advisers: “You Must Fully Comply with the New Marketing Rule. You Can’t Partially Opt-In.”

On March 18, 2021, the staff of the Division of Investment Management released an FAQ regarding the new marketing rule. The new rule becomes effective May 4, 2022, but has a compliance date of November 4, 2022. The FAQ makes clear that an adviser may comply with the new rule prior to November 4, 2022,Continue reading “SEC Staff to Advisers: “You Must Fully Comply with the New Marketing Rule. You Can’t Partially Opt-In.””

SEC Issuing Legally Questionable Moratoriums on Registration for Foreign Investment Adviser Applicants

Investment advisers with their principal place of business in foreign jurisdictions have recently become subject to moratoriums on registration because the U.S. Securities and Exchange Commission (the “Commission” or the “SEC” ) and its Staff have concerns that these foreign applicants may be unable or unwilling to make their books and records available for inspectionContinue reading “SEC Issuing Legally Questionable Moratoriums on Registration for Foreign Investment Adviser Applicants”

Marketing Rule to Officially Become Effective on May 4, 2021

Its official. The Marketing Rule was published in the Federal Register this morning on March 5, 2021. This means that the rule will become effective on May 4, 2021. The new rule contemplates an eighteen-month transition period between the effective date of the rule and the compliance date. This means your firm should be preparedContinue reading “Marketing Rule to Officially Become Effective on May 4, 2021”

Will Investment Advisers Registered with the States Be Able to Use Testimonials?

 On December 22, 2020, the U.S. Securities and Exchange Commission adopted amendments to Rule 206(4)-1 under the Investment Advisers Act of 1940 relating to advertisements. Among other things, these amendments, when effective, will permit testimonials. The rules are currently under review by the Biden Administration and won’t become effective until 60 days after they are publishedContinue reading “Will Investment Advisers Registered with the States Be Able to Use Testimonials?”