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.
Category Archives: Legal
Determining Whether a Client Can Invest in a Private Investment
I often receive questions from investment advisers on whether their clients can invest in a hedge fund, private equity fund, private company or some other type of private investment. For purposes of this article, I refer to them all as “private investments”. For example, clients will ask “can John Doe’s Trust invest in 123 Capital,Continue reading “Determining Whether a Client Can Invest in a Private Investment”
SEC Proposes Exemptive Relief for “Finders” – A Win-Win Scenario?
I was recently quoted by WealthManagement.com on the recent “finders” exemption proposal by the U.S. Securities and Exchange Commission. That proposal would provide clarity to “finders” on how they can avoid allegations that they are acting as broker-dealers in need of registration under Section 15 of the Securities Exchange Act of 1934. The proposal is available here.Continue reading “SEC Proposes Exemptive Relief for “Finders” – A Win-Win Scenario?”
The Rise of Fee-Based Annuities and Potential Licensing Issues for Independent Investment Advisers
In recent years, as they have seen the exponential growth of independent investment advisers, insurance issuers have sought creative ways to place their products in the space. Hence the creation of the fee-based variable annuity–a product that was at one time only an arrow in the quiver of the commission brokerage industry. Now that theseContinue reading “The Rise of Fee-Based Annuities and Potential Licensing Issues for Independent Investment Advisers”
[Certain] State Securities Commissioners Overstepping Legal Authority in Mandating Form CRS
Many state securities commissioners are starting to require the preparation, filing, and delivery of Form CRS for investment advisers in their jurisdictions. State securities authorities must be prepared to provide their legal authority for requiring Form CRS or make it clear that compliance with their desires are optional. It is a detriment to the industry,Continue reading “[Certain] State Securities Commissioners Overstepping Legal Authority in Mandating Form CRS”
SEC Provides Relief for Advisers in Light of COVID-19
On Friday, March 13, 2020, the SEC issued an Order under Section 206A of the Investment Advisers Act of 1940 that is intended to provide relief for certain investment advisers who are impacted by COVID-19. For the period between March 13, 2020 and April 30, 2020, the SEC is providing relief to registered investment advisersContinue reading “SEC Provides Relief for Advisers in Light of COVID-19”
Registered Investment Adviser Entity Formation, Registration and Employment Transition Checklists
I have assisted numerous financial industry professionals with their transition from the wire-house channel to operating as independent investment advisers. To do so takes experience, legal know-how, preparation, and patience. While other compliance companies can offer to register an investment adviser for a very small fee, I always caution prospective clients to be wary ofContinue reading “Registered Investment Adviser Entity Formation, Registration and Employment Transition Checklists”
The Disclosure Obligation under Regulation Best Interest
While this blog is typically focused on issues pertinent to investment advisers and their associated persons, Regulation Best Interest also extends to “associated persons of a broker dealer”. Many clients that I represent have relationships with broker-dealers and are responsible for supervising persons who are “associated persons of a broker dealer”. I often refer toContinue reading “The Disclosure Obligation under Regulation Best Interest”
WEBINAR: Understanding and Leveraging the Proposed Advertising Rules
On Tuesday, November 19, 2019, my colleague and I hosted a webinar entitled “Understanding and Leveraging the Proposed Advertising Rules.” The presentation discussed the U.S. Securities and Exchange Commission’s November 4, 2019, proposed amendments to the advertising rules and the cash solicitation rules under the Investment Advisers Act of 1940. A copy of the webinarContinue reading “WEBINAR: Understanding and Leveraging the Proposed Advertising Rules”
SEC Considering Proposal to Amend the Advertising Rules
My thoughts on the new Advertising Rule Back in March 2019, Mark Schoeff from InvestmentNews reported that the U.S. Securities and Exchange Commission (“SEC”) was contemplating amending Rule 206(4)-1 under the Investment Advisers Act of 1940 (the “Advertising Rule”) . Before that, Reuters made a similar report in March. Before that, the Investment Adviser AssociationContinue reading “SEC Considering Proposal to Amend the Advertising Rules”