The Interconnectedness of Markets and Reserving Judgment in Light of Recent Trading Events

Acting Chair Allison Herren Lee and Commissioners Peirce, Roisman, and Crenshaw recently released a statement on the recent market volatility. Their statement highlighted the Commission’s essential mission to “protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.” Recent events serve as a reminder that these functions are interconnected and there are veryContinue reading “The Interconnectedness of Markets and Reserving Judgment in Light of Recent Trading Events”

Managing Cryptocurency and Digital Assets in Separate Accounts. Comply With The Custody Rule!

In late 2020, MicroStrategy, led by CEO Michael Saylor, purchased $650 million worth of Bitcoin as a reserve asset. Morgan Stanley and its subsidiaries and affiliates also purchased a considerable part of MicroStrategy. In early 2021, the value of Bitcoin crossed $30,000. Then $40,000. Institutional investors started flocking to the asset. Even an old stodgyContinue reading “Managing Cryptocurency and Digital Assets in Separate Accounts. Comply With The Custody Rule!”

A Running List of Practical Pointers Under the New Marketing Rule

The new marketing rule provides an opportunity for investment advisers to compliantly test out new marketing methods. This post will provide a running list of pointers that I think investment advisers and investment professionals may find helpful or interesting. All of these practice pointers assume the rule is effective. None of these pointers should beContinue reading “A Running List of Practical Pointers Under the New Marketing Rule”

SEC Amends Advertising and Solicitation Rules

On December 22, 2020, the U.S. Securities and Exchange Commission adopted amendments to the rules under the Investment Advisers Act of 1940 relating to advertisements. A copy of the adopting release is available here. When news first broke, I provided my initial thoughts via Twitter (which I have included below), but the purpose of thisContinue reading “SEC Amends Advertising and Solicitation Rules”

VOYA Financial Advisors Enforcement Action

Who should be worried? What should we be doing? What went wrong? Should we care? The U.S. Securities and Exchange Commission (“SEC”) settled an enforcement matter with Voya Financial Advisors, Inc. on December 21, 2020. This is yet another case that does a disservice for the investment advisory legal and compliance industry by providing unclearContinue reading “VOYA Financial Advisors Enforcement Action”

Department of Labor’s Final Fiduciary Rule Exemption – What’s Different Between the Proposal and the Final Exemption?

The Department of Labor announced its long-awaited final class exemption from certain prohibited transaction under the Employee Retirement Income Security Act of 1974, asamended (the Act). Putting aside whether the Biden administration will freeze and repeal this exemption, this post is designed to address the differences between the proposal and the final exemption. The finalContinue reading “Department of Labor’s Final Fiduciary Rule Exemption – What’s Different Between the Proposal and the Final Exemption?”

SEC Likely to Adopt New Advertising Rules for Investment Advisers

On Wednesday, December 16, 2020 at 10:00 am, it is looking highly like that the U.S. Securities and Exchange Commission will adopt amendments to the advertising rules under the Investment Advisers Act of 1940. If you are interested, here is a link to the notice announcing the meeting (and the likely vote). The hearing will be availableContinue reading “SEC Likely to Adopt New Advertising Rules for Investment Advisers”

New York Investment Adviser Representatives to Become Subject to Licensing (Finally)

On December 1, 2020, New York Attorney General James announced rules that will require the licensing of investment adviser representatives (“IARs”) in New York. IARs will be required to register through the Central Registration Depository/Investment Adviser Registration Depository. If you render investment advice from a place of business in New York, now is the timeContinue reading “New York Investment Adviser Representatives to Become Subject to Licensing (Finally)”

NASAA Proposes Model Rule for Continuing Education With A Number of Shortcomings

I applaud the North American Securities Administrators Association (“NASAA”) for proposing a model rule to assist state securities regulators in implementing a mandatory continuing education program for investment adviser representatives (“IAR”) in their jurisdiction. These efforts are long overdue to convince the public that the rendering of financial advice is a legitimate profession. A copyContinue reading “NASAA Proposes Model Rule for Continuing Education With A Number of Shortcomings”

Branch Office Supervision in Light of OCIE Guidance

On Monday, OCIE released a Risk Alert focused on their recent observations from focused examinations of investment advisers that operate out of multiple locations or branch offices. I provided a summary of that guidance here. So what does this mean for investment advisers who operate multiple offices or branch offices? Advisers should review their policies andContinue reading “Branch Office Supervision in Light of OCIE Guidance”