Advisers

FYI: Senate Confirms SEC Commissioners

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FYI: On Thursday, the US Senate confirmed the nominations of Hester Peirce (Republican) and Robert J. Jackson, Jr. (Democrat) to be SEC commissioners, which brings the SEC to its full complement of five commissioners for the first time since 2015. The new commissioners will join Chairman Jay Clayton (Republican) and Commissioners Kara Stein (Democrat) and Michael Piwowar (Republican) who are already serving on the Commission. SEC Public Statement: https://www.sec.gov/news/public-statement/statement-clayton-piwowar-stein-122217-2. * * *

Advisers

FYI: Email Supervision Failures

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FYI: FINRA fined Raymond James Financial Services, Inc. (RJFS), $2 million for failing to maintain reasonably designed supervisory systems and procedures for reviewing emails. In addition to the fine, RJFS has agreed to conduct a risk-based retrospective review to detect potential violations evidenced in past emails. In this settled action, FINRA’s findings included: During the relevant 9-year review period, RJFS’s email review system was flawed in significant respects, allowing millions of emails to evade meaningful review and creating the unreasonable risk that certain misconduct by firm personnel could go undetected by the firm. The “lexicon” words and phrases used to […]

Advisers

FYI: Current IM Initiatives

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FYI: The new Director of the SEC’s Division of Investment Management, Dalia Blass, spoke at a conference recently outlining two initiatives currently underway in the Division: 1) Investor experience – This initiative entails taking a fresh look at the investor experience, including what and how disclosure is made to investors, considering technological advances and investor preferences. 2) Board outreach – This initiative is aimed at reviewing and reevaluating what fund boards are asked to do, with the aim of allowing them to focus on areas where their judgment and experience uniquely equip them to provide oversight. In connection with these […]

Advisers

FYI: SEC Delays Fund N-PORT Reporting Requirements

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FYI: The SEC took action today to essentially delay for 9 months the pending requirement for investment companies to file new Form N-PORT. Among other things, this delay will give the Commission more time to uplift the functionality and security protocols surrounding the EDGAR system in order to better protect the sensitive, non-public information called for in Form N-PORT. Under SEC rules as originally adopted in 2016, larger funds would have been required to submit reports on Form N-PORT no later than July 30, 2018. However, under the temporary final rule adopted today, larger funds will instead be required to […]

Brokers

FYI: FINRA Report on Exam Findings

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FYI: FINRA has issued a report summarizing findings from recent broker-dealer examinations, focused on the following areas because of their potential impact or the frequency with which they occur: –cybersecurity –outside business activities (OBAs) and private securities transactions –product suitability –best execution –market access controls –alternative investments in IRAs –net capital and credit risk assessments –order capacity (agency, principal, riskless principal, etc.) –Reg. SHO (short selling), and –TRACE reporting of fixed income securities. Deficiencies observed in these areas typically resulted when: Firms or their personnel did not adequately understand the rules governing these areas or their responsibilities under those rules; […]