Under the anti-fraud provision of the Investment Advisers Act of 1940 (“Investment Advisers Act”) investment advisors registered with the U.S. Securities and Exchange Commission (“SEC”) must comply with the provision’s requirements concerning advertising and marketing materials. In efforts to prevent fraudulent, deceptive, or manipulative acts, your registered investment advisor should have in place strong supervisory and compliance policies and procedures designed to approve and monitor advertising and marketing materials. Federally registered investment advisors are routinely cited examination deficiencies for issuing non-compliant advertising materials. Much less, investment advisor firms have been cited for simply not establishing reasonably designed compliance policies and procedures for the creation, review and approval of advertising materials.
Category Archives: NASAA
NASAA Releases Statement on SRO Bill
May 04, 2012
Jack Herstein, the president of the North American Securities Administrators Association (“NASAA”) and Assistant Director of the Nebraska Department of Banking and Finance’s Bureau of Securities, has released a statement regarding the Investment Adviser Oversight Act of 2012, recently introduced by Rep. Spencer Bachus, the Chairman of the U.S. House Financial Services Committee.
Coordinated Examinations Result in the Release of Recommended Best Practices for Investment Advisers
October 19, 2011
As the approaching deadline nears for mid-size investment advisers (those with assets under management between $25 and $99 million) to switch from U.S. Securities and Exchange Commission (“SEC”) registration to state registration, many state securities regulators are making preparations for increased regulatory oversight. As these efforts are taking place, the North American Securities Administrators Associations (“NASAA”) recently released “an updated series of recommended best practices that investment advisers should consider to minimize the risk of regulatory violations.” These best practices were developed after a series of coordinated examinations were conducted between January 1, 2011 and June 30, 2011. Examinations were conducted by 45 state and provincial securities examiners of 825 investment advisers. According to Jack Herstein, NASAA President and Assistant Director of the Nebraska Banking and Finance Department, Bureau of Securities, “Our goal in identifying deficiencies and recommending best practices is to help investment advisers strengthen their internal compliance programs and improve the services they provide to clients.”
The Switch from SEC to State Registration for Investment Advisers with Less than $100 Million of Assets under Management
August 31, 2010
The eligibility for registration as an investment adviser with the U.S. Securities and Exchange Commission (“SEC”) based upon the amount of assets under management will increase from the current minimum threshold of $25 million to a new threshold of $100 million pursuant to the Dodd-Frank Financial Reform Act, which passed on July 21, 2010. The Dodd-Frank Financial Reform Act included a provision affecting registered investment advisers eligible for SEC registration based upon the amount of assets under management and requiring that registered investment advisers with less than $100 million in assets under management register with state securities regulators rather than the SEC. It is estimated that as a result of this increased eligibility threshold, over 4,000 investment advisers currently registered with the SEC will need to register with the state securities regulator for each state where the investment adviser firm conducts investment advisory business and does not meet an exemption from the investment adviser registration requirements in that state.
