In its Report on Activities for Fiscal Year 2020, the Office of the Investor Advocate of the U.S. Securities and Exchange Commission (“SEC”) noted that the Commission’s rulemaking agenda failed to address several modernizations sought by investors such as a “coherent framework for the disclosure of environmental, social and governance (ESG) matters that could influence a company’s long-term performance” despite support for such a standardized disclosure format from the SEC’s Investor Advisory Committee.
On December 16 2020, the Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) released a Risk Alert about its assessment of the compliance practices of SEC-registered investment advisers and broker dealers with regard to Rule 13h-1, which was adopted to help the SEC identify and obtain information on certain market participants (referred to as “Large Traders”) that conduct a substantial amount of trading activity as measured by volume or market value, in national market system (“NMS”) securities. In the Risk Alert, OCIE noted that some advisers and broker dealers it examined were unaware of the rule or its specific requirements and, consequently, is encouraging all SEC-registered investment advisers and broker-dealers to review and update their compliance policies and procedures, as needed, to ensure compliance with Rule 13h-1. Click here to read the SEC’s Risk Alert for Large Trader Obligations.
SEC Risk Alert – Investment Adviser Compliance Programs
December 17, 2020
On November 19th 2020, the Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) released a Risk Alert about its assessment of the compliance practices of SEC-registered investment advisers with regard to SEC Rule 206(4)-7 (the “Compliance Rule”) under the Investment Advisers Act of 1940. In its Risk Alert, the SEC noted that Compliance Rule deficiencies are among the most common discovered by OCIE during SEC registered investment adviser examinations. Click here to read the SEC’s Risk Alert for Investment Adviser Compliance Programs.
New York Adopts Investment Adviser Representative Registration Rule
December 07, 2020
In December 2020, the New York Attorney General’s Investor Protection Bureau (IPB) adopted proposed rule changes to 13 N.Y.C.R.R. Part 11. These rule changes require the registration of investment adviser representatives – including principals, supervisors and solicitors for registered investment advisers – through the WebCRD/IARD system beginning February 1, 2021. Prior to the rule change, New York was the only state that did not license investment adviser representatives via the WebCRD/IARD system. Click here to read the final adopted rule.
Upcoming Webinar – Preparing a Compliance Calendar for 2021
December 03, 2020
RIA Compliance consultants is hosting a webinar, “Preparing Your Compliance Calendar for 2021” on Wednesday, December 16, 2020 from 12:00 p.m. to 1:00 p.m. Central. During this webinar, RIA Compliance Consultants and representatives from SmartRIA will discuss a variety of topics related to the ongoing regulatory requirements for registered investment advisers.
Deadline for Receipt of Preliminary Renewal Statement Payments Quickly Approaching
December 03, 2020
The deadline for investment advisers to submit their Preliminary Renewal Statement payment is quickly approaching. FINRA must be in receipt of the full payment listed on the Preliminary Renewal Statement by December 14, 2020. Investment advisers with sufficient funds in their Flex-Funding Account to cover the Preliminary Renewal Statement payment will have funds automatically transferred beginning on December 14, 2020 to the Renewal Account to cover total renewal fees owed. Automatic transfers will be conducted every day after December 14, 2020 until the WEB CRD/IARD shuts down for year-end processing on December 27, 2020. Investment advisers that choose to mail in their payments are advised to do so now to avoid delays and to ensure funds are received by the deadline. If your investment adviser would like assistance with the annual renewal service, click here for more information on or to purchase RIA Compliance Consultants’ IARD Renewal Program and ADV Amendment Service. If you have questions regarding these or any of the other services offered by RIA Compliance Consultants, contact your support person or our business development team at bizdevteam@ria-compliance-consultants.com
While completing the annual review of its compliance program, an investment adviser should update its self-identification of the risks facing the firm.
SEC Risk Alert – Investment Adviser Firms with Multiple Branch Offices
November 23, 2020
On November 9 2020, the Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) released a Risk Alert about its assessment of the compliance practices of SEC-registered investment advisers that have multiple branch offices. In its Risk Alert, the SEC noted that its Multi-Branch Initiative (“Initiative”) focused on investment advisers practices relating to compliance programs and supervision, with a particular focus on the Code of Ethics Rule, Custody Rule, and fiduciary obligations relating to fees, expenses, and advertising. The SEC also evaluated how supervised persons at branch locations provided investment advice, focusing on oversight of investment recommendations, management and disclosure of conflicts of interest, and allocation of investment opportunities.
Reviewing an Investment Adviser’s IARD Renewal Statement
November 19, 2020
As a chief compliance officer (“CCO”) reviews his or her investment adviser firm’s Preliminary Renewal Statement from the IARD system, the CCO should consider whether his or her investment adviser firm desires to terminate a firm-level investment adviser state registration or notice filing with a state securities regulator so the firm can receive a regulatory fee refund.
Preliminary Renewal Statement Now Available
November 18, 2020
As of Monday, November 16, 2020, your investment advisor firm can access, via its IARD account, its Preliminary Renewal Statement for the upcoming year. Investment advisor firms are assessed individual registration fees based on the state(s) that the firm is notice filed or registered in and the number of investment advisor representatives and their approved registration statuses. The amount reflected in the Preliminary Renewal Statement is the amount of renewal fees investment advisors must pay in order to maintain active registration for the firm and its investment advisor representatives.
