Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), an investment adviser who has between $25 million and $100 million in assets under management will have to withdraw its registration with the U.S. Securities and Exchange Commission (“SEC”) and register with one or more state securities regulators pursuant to the applicable state laws. When the Dodd-Frank Act was enacted on July 21, 2010, the deadline for an investment adviser to switch its registration was July 21, 2011, the one year anniversary of the bill’s enactment. However, in a letter dated April 8, 2011, Robert Plaze, the associate director of the SEC’s Division of Investment Management, stated that the deadline for “the Switch” is likely to be extended until the first quarter of 2012. Click here to view the full letter.
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YOUR INVESTMENT ADVISOR NEEDS TO UPDATE POLICIES & PROCEDURES DUE TO NEW FORM ADV PART 2
April 13, 2011
Now that your investment advisor has completed its new Form ADV Part 2, it’s time to update your investment advisor’s written policies and procedures to reflect the regulatory changes related to the Form ADV Part 2.
Electronic Delivery of New Form ADV Part 2
April 12, 2011
As your investment adviser firm is getting ready to deliver the new Form ADV Part 2 to its investment advisory clients, you may be considering electronic delivery as an option.
SEC Proposes Rule Which Would Exclude Family Office from Investment Adviser Registration
October 14, 2010
The United States Securities and Exchange Commission (“SEC”) has proposed to adopt Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940 which would exempt a “family office” from registration under the Investment Advisers Act.
Washington Passes Legislation to Prevent the Financial Exploitation of a Vulnerable Adult
September 20, 2010
On June 10, 2010, the State of Washington passed new legislation designed to prevent the financial exploitation of vulnerable adults. The new legislation provides financial institutions the power to refuse to conduct a transaction if the institution suspects abuse and also requires employees of investment advisers and broker dealers to undergo abuse identification training. Section 20(16) of Chapter 74.34 of the Revised Code of Washington defines “vulnerable adult” as “a person:
Did you know that most state securities regulators require paid solicitors of investment advisor firms to license as investment advisor representatives? This means that the solicitor must either establish his/her own investment advisor firm or license under an existing investment advisor firm. From the solicitor’s perspective it is far easier to simply license under an existing investment advisor firm rather than forming a new investment advisor firm. However, what does that mean for the existing investment advisor firm holding the solicitor’s investment advisor representative license?
Kenneth Starr, an investment adviser representative, to several celebrities and other wealthy clients, was arrested on May 27th for allegedly using client funds for his own personal use. Starr has been charged in a New York District Court with fraud by an investment advisor, a wire fraud scheme to obtain property, money laundering, false statements in an IRS Filing, and false statements to a federal officer, for fraudulently misappropriating over $30 million of client funds. The Complaint also charges Andrew Stein, an associate of Starr’s, with various tax fraud violations. (Click here for the full Complaint).
SEC Rule 206(4)-7 under the Investment Advisers Act of 1940 (Investment Advisers Act) requires an investment adviser registered with U.S. Securities and Exchange Commission (“SEC”) to appoint an individual to serve as the Chief Compliance Officer (CCO). The CCO must be an individual who is competent and knowledgeable regarding the Investment Advisers Act, should be empowered with full responsibility and authority to develop and enforce appropriate policies and procedures for the investment adviser, and should have a sufficient position of seniority and authority within the organization to compel others to adhere to the investment adviser’s policies and procedures. It is important to note that if the firm is a state registered investment adviser, the primary compliance principal may not necessarily have the exact title of CCO as it may not be required by the applicable state securities regulations; however, if an individual is required to be appointed as the person responsible for supervision and compliance in Form ADV, Part 1B, Item 2A, this individual is acting in a capacity similar or equal to that of the CCO.
SEC Announces CCOutreach Registration
September 25, 2007
On September 19, 2007, the U.S. Securities & Exchange Commission (SEC) announced it is now taking reservations for the CCOutreach National Seminar which will be held November 14 at the SEC’s national headquarters in Washington, D.C. According to the SEC, the CCOutreach program is intended to help mutual fund and investment adviser Chief Compliance Officers (CCO) further enhance their compliance programs for the protection of investors. Attendance is limited to the first 500 and is open on a first-come, first-serve basis with CCOs given priority. The seminar will last from 9:00 AM to 5:00 PM.
Results from SEC’s Inspection of “Free Lunch” Seminars
September 12, 2007
The United States Securities and Exchange Commission (“SEC”), North American Securities Administrators Association (“NASAA”) and Financial Industry Regulatory Authority (“FINRA”) released the findings from their recent joint inspection of “free lunch” seminars targeted at seniors.
