On November 9, 2020, the Office of Compliance Inspections and Examinations (“OCIE”) of the US Securities and Exchange Commission (“SEC”) published a risk alert discussing its observations from a series of examinations that focused on SEC-registered investment advisers operating from numerous branch offices and with operations geographically dispersed from the adviser’s principal or main office.
As COVID-19 continues to impact global markets, the U.S. Securities and Exchange Commission (“SEC”) have recently provided certain guidance and targeted relief in recognition of the potential disruption that COVID-19 may have on market participants regulated by the Commission. The following Mayer Brown client alerts describe and take a closer look at certain COVID-19 related…
In April 2018, the SEC proposed an Interpretation Regarding Standard of Conduct for Investment Advisers. In that proposal, the SEC has proposed to interpret the duty of loyalty (which, combined with the duty of care, constitutes fiduciary duty) as requiring advisers to put client interests ahead of their own and make full and fair disclosure of all material facts of the relationship. More particularly, the SEC stated that advisers must seek to avoid conflicts of interest and make full and fair disclosure of material conflicts that could affect the relationship. If you stopped reading the release at this point, you might think this is a clear articulation of what the duty means and how we practice in the area of conflicts.
Continue Reading A New Standard for Investment Adviser Fiduciary Duty?
In the past 2 years, we have seen a clear uptick in desk exams by the SEC’s investment adviser examination staff. These “desk” exams consist of the staff sending a preliminary document request (the same as they would if they intended to arrive in person), reviewing the materials presented, and then typically sending additional requests. Sometimes requests from the staff can reach double digits depending upon what information is previously submitted. Following that production, and any subsequent follow-up phone calls, the staff typically issues a deficiency letter and the registrant responds.
There are pros and cons to this kind of exam. …
Continue Reading SEC Desk Exams: Up Close But Not Personal