Privacy and the safeguarding of customer information continues to be an important compliance topic from the SEC’s perspective, including its examination staff.  The SEC’s Office of Compliance Inspections and Examinations (OCIE) recently released a Risk Alert highlighting common examination deficiencies from registered advisers and broker-dealers related to Regulation S-P, a rule requiring that such registrants

On March 11, 2019, the SEC announced that it settled charges against 79 investment advisers who self-reported violations in connection with the SEC’s Share Class Selection Disclosure Initiative (the “Initiative”).  Please see the link below for a Legal Update on this enforcement action, which discusses the Initiative in greater detail as well as the eligibility

On February 28, 2019, the staff of the SEC’s Division of Investment Management granted no-action relief in connection with the 1940 Act’s in-person meeting requirements under Section 15 of the Investment Company Act of 1940 (the “1940 Act”).[1]  This relief would apply to the boards of directors of a registered investment companies (each a “fund”) and would permit them to, under certain delineated circumstances, approve certain investment advisory and principal underwriting contracts of a fund, the 12b-1 plan of a fund and the selection of a fund’s independent public accountant telephonically, either by video conference or by other means by which all participating directors may participate and communicate with each other simultaneously during a meeting.
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In late 2018, the SEC’s Office of Compliance Inspections and Examinations (OCIE) released its 2019 examination priorities, which cover not only investment advisers and registered funds, but also broker-dealers and transfer agents.  To help you digest and better understand these 2019 exam priorities, our Washington, DC-based Investment Management practice has prepared a legal update giving

Fund managers that are affiliated with U.S. banks, or that have historically courted U.S. banks  (or their affiliates) as investors in their funds, are by now very familiar with the restrictions imposed by the “Volcker Rule” since its adoption in December 2013.  A massive regulatory undertaking, the rule was adopted by five of the U.S. financial regulators (namely, the Federal Reserve, the FDIC, the Office of the Comptroller of the Currency, the SEC, and the CFTC) acting in concert, and resulted in sweeping changes to how U.S. banks and their affiliates make proprietary investments and how they interact with so-called “covered funds.”  From the perspective of a ’40 Act practitioner, it was clear at the time, and has remained so ever since, that the group of august regulators did not, collectively, grasp some of the implications of the way the final regulation approached some issues involving covered funds–including the very way that term was defined.

After several years of Congressional logjam and the regulators addressing some of the more vexing issues in the Volcker Rule through FAQs, we now suddenly find ourselves moving forward with changes to the Volcker Rule on multiple fronts.  Unfortunately–at least from this practitioner’s perspective as an investment management lawyer–most of the changes we’ve seen so far are targeted at the proprietary trading side of the rule, rather than the covered fund side.  That said, there are still a few things on the covered fund side worth mentioning, especially for industry participants interested in making their voice heard by the regulators.


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What is the GDPR?

Even if an investment adviser or its private funds have no presence in the European Union (EU), it may still need to be concerned about EU data protection laws, in particular the new European General Data Protection Regulation (EU) 2016/679 (the “GDPR”).  The GDPR came into force on May 25, 2018, and replaced the prior data protection law, the EU Directive 95/46/EC.  The GDPR introduces significant changes from the prior EU Directive, including new jurisdictional scope that makes the GDPR apply not only to businesses established in the EU but also to any non-EU businesses that offer goods or services to individuals within the EU or that monitor individuals in the EU.  This means that investment advisers and funds with investors in the EU may potentially be subject to the GDPR, which is significant because of the other changes brought about by the GDPR, including a maximum fine for non-compliance of the higher of 4 percent of an enterprise’s worldwide turnover or €20 million per infringement, a 72-hour data breach notification requirement and new data subject rights (including the “right to be forgotten”). (For more information about these changes, please see our website page on the GDPR.)


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