Advisers

FYI: SEC Rule Changes Made Today

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FYI: Today, the SEC acted on several new requirements, among them: 1. iXBRL – The SEC approved rule changes requiring various SEC forms and related data to be filed with the Commission in “Inline” XBRL structured data format. This includes investment company risk/return disclosure that appears in fund registration statements/prospectuses. Funds are already required to file this data in XBRL format, which permits the data to be machine-readable and utilized in an “interactive” manner. However, funds are currently required to file the XBRL data in a separate registration statement or related filing made for that specific purpose within 15 days […]

Advisers

FYI: Chairman’s Testimony – Areas of Focus

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FYI: This week, the SEC Chairman testified before a Congressional oversight committee, giving a wide-ranging report on areas of focus for the Commission and recent successes and frustrations. His remarks emphasized that as the Commission pursues its tripartite mission—to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation—he believes the Commission should focus on Main Street investors. Specifically in the area of examinations, the Chairman reported that in FY 2017, OCIE completed nearly 2,900 examinations, an increase of more than 450 examinations from the prior year, covering all types of registered entities (BDs, IAs, funds, municipal advisors, […]

Advisers

FYI: Custody Rule FAQs Update

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FYI: This week, the SEC posted two new questions on its Advisers Act custody rule FAQs, both centered on the same issue. According to the questions, an adviser that does not have a copy of a client’s custodial agreement, and does not know, or have reason to know whether the agreement would authorize the adviser to instruct the custodian to disburse, or transfer, funds or securities, need not comply with the custody rule with respect to that client’s account if that authorization would be the sole basis for custody. This is welcomed relief for advisers in the wake of the […]

Funds

FYI: More Fund Report Delivery Options Available

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FYI: Yesterday, the SEC voted to take 3 actions as part of its on-going initiative to improve and modernize the design, delivery and content of information provided to fund investors. 1) The Commission adopted new Investment Company Act Rule 30e-3 (proposed originally in May 2015) that allows certain funds an optional method to transmit shareholder reports to investors. This is as close as the SEC has come to allowing a “notice and access” delivery method for fund reports, where funds may make the materials publicly accessible at a specified website address, free of charge, if they send investors a paper […]

Advisers

FYI: Recent Developments Concerning Financial Exploitation of Senior Investors

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FYI: More developments have occurred in the area of protecting senior/vulnerable adults from financial abuse or exploitation: 1) On June 1, 2018, the SEC issued a no-action letter to the ICI permitting mutual funds (or their transfer agents) to temporarily delay for more than the statutory 7 days usually required for redemption, the disbursement of redemption proceeds from the mutual fund account of a “Specified Adult” held directly with the transfer agent based on a reasonable belief that financial exploitation has occurred, is occurring, has been attempted, or will be attempted. The ICI’s incoming letter states that this no-action relief […]