Advisers

FYI: SEC Seeks IA Custody Information

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FYI: The SEC’s Division of Investment Management is requesting information on industry practices in certain areas to help it consider whether and how further amendments to the Advisers Act Custody Rule should be made. This request is further evidence that the SEC is still struggling to understand all the nuances of the Custody Rule and its application in a variety of IA operations. The request sets out a series of questions seeking information about custody and related practices in two areas of particular concern: 1) Non-DVP Assets. Non-DVP assets are securities or other assets that do not settle on a […]

Advisers

FYI: 79 Settlements Announced under SCSD Initiative

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FYI: Today, the SEC issued settled enforcement orders against 79 IAs that collectively will return $125 million to investors under the Division of Enforcement’s 2018 Share Class Selection Disclosure Initiative. The initiative aimed to incentivize IAs to self-report violations resulting from undisclosed conflicts of interest in the selection or recommendation of mutual fund share classes that paid the IAs, their BD affiliates and/or their reps a 12b-1 fee, when less expensive share classes were available. According to the SEC’s announcement, participation in the initiative allowed IAs to avoid financial penalties if they timely self-reported undisclosed conflicts of interest, agreed to […]

Funds

FYI: In-Person Fund Board Vote No-Action Relief

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FYI: The SEC’s Division of Investment Management has issued a no-action letter to the Independent Directors Council (IDC), indicating that fund Board voting will no longer be required to be in-person in certain circumstances where current law would otherwise require that it be so. This appears to be one step in the effort to modernize and improve the regulations governing funds and their Boards in order to better allow Boards to dedicate their time and attention to areas where director oversight is most valuable. Currently, in-person Board voting is generally required when the Board votes to approve or renew certain […]