There is good news for investment adviser firms located in the United Kingdom (“UK”) desiring to register as an investment adviser firm with the United States Securities and Exchange Commission (“SEC”).

Yesterday, the SEC announced that UK Information Commissioner Office has published guidance that “…concluded that the UK [General Data Protection Regulation “GDPR”] does not impose legal barriers to the transfer of personal data from these entities directly to the SEC for regulatory or enforcement purposes.” See https://www.sec.gov/news/public-statement/roisman-uk-ico-personal-data-transfers-data-sec?utm_medium=email&utm_source=govdelivery .

To put this in context, although not stated on the SEC’s website, it’s our understanding that the European Union’s General Data Protection Regulation and the Swiss Data Protection Act have raised concerns within the SEC about whether these foreign data protection regulations prohibit an investment adviser, which is located in the EU or Switzerland but registered with the SEC, from sharing personal information about U.S. clients with the SEC when conducting an examination or proceeding with an enforcement action under U.S. laws (i.e., the Investment Advisers Act of 1940 as amended). As a result, this scrutiny by SEC has made it very difficult for a new investment adviser applicant based in the EU (which included the UK prior to Brexit) or Switzerland to receive approval from the SEC to register as an investment adviser in the United States.

The SEC noted that the UK Information Commissioner Office clarified “…that the UK GDPR permits UK firms’ transfers of personal data to the SEC directly in connection with, among other things: (1) the SEC’s evaluation of the firms’ compliance with legal obligations in the United States, including during an examination; and (2) the SEC’s efforts to prevent and enforce against potential unlawful behavior.” See https://www.sec.gov/news/public-statement/roisman-uk-ico-personal-data-transfers-data-sec?utm_medium=email&utm_source=govdelivery . The UK ICO explained that “…UK firms with regulatory obligations to the SEC can rely on the “public interest” derogation of the UK GDPR when directly transferring personal data to the SEC.” For additional details, the UK Information Commissioner Office’s guidance can be viewed at https://ico.org.uk/media/2619110/sec-letter-20200911.pdf .

If your firm is seeking assistance in registering as an investment adviser in the United States with the SEC, please schedule an introductory call with our Business Development Team at https://www.ria-compliance-consultants.com/call to learn more about our investment adviser registration services.

Other Resources About Investment Adviser Registration:

Turn-Key Investment Adviser Registration Service;

How to Become a Registered Investment Adviser;

Investment Advisor Registration FAQs;

Registering as a State Investment Advisor;

Series 65; and

Foreign Investment Adviser – Undertaking to Provide Books & Records to SEC.