The Texas State Securities Board has announced extended relief from certain filing obligations for securities professionals regulated by Texas, including state registered investment advisers and investment adviser representatives. Filers that would otherwise be required to update a filing solely to report a change in the office of employment address of an employee, agent, or representative, or any newly opened temporary branch or office location between March 13, 2020 and September 30, 2020 will not be penalized or sanctioned for not updating a filing to reflect a temporary branch or work location or space-sharing arrangement. When first announced in March 2020, the waiver ended on June 30, 2020.
On June 23, 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 manage private equity funds or hedge funds (“private fund advisers”). In its Risk Alert, the SEC noted that over 36% of SEC registered investment advisers manage private funds, which represent a significant area of investment for pensions, charities, endowments, and others. Click here to read the SEC’s Risk Alert for Private Funds.
SEC Publishes New Website for Main Street Investors
June 22, 2020
On June 15th, 2020, the United States Securities and Exchange Commission (“SEC”) announced a new website designed for Main Street Investors, intended to help retail investors navigate the new Form CRS/Form ADV Part 3. Published in a “Question and Answer” format, the website explains to retail investors the purpose of the Form CRS/Form ADV Part 3 and describes the information they can expect to find in the Form CRS/Form ADV Part 3. Click here to view the SEC’s new website for Main Street Investors. As an SEC registered investment adviser firm prepares its Form CRS/Form ADV Part 3 training for its supervised persons, RIA Compliance Consultants recommends that a review of the Main Street Investors website should be included as a component of such compliance training.
Oklahoma Withdraws Requirement for State Registered Investment Advisers to File Form ADV Part 3
June 20, 2020
On June 19, 2020, the Oklahoma Department of Securities announced the withdrawal (effective immediately) of its recent requirement that state registered investment adviser firms must file the Form CRS/Form ADV Part 3 relationship summary as part of the Form ADV filing.
Form CRS/Form ADV Part 3 Testing for Compliance
June 18, 2020
With the fast approaching deadline to file and deliver the new Form CRS/Form ADV Part 3 relationship summary, investment adviser firms registered with the United States Securities and Exchange Commission (“SEC”) must take steps to test their compliance with this Form CRS/Form ADV Part 3 rule. In its recent Risk Alert, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) discussed what SEC registered investment adviser firms can expect from an examination that focuses on Form CRS/Form ADV Part 3 compliance. Click here to read the SEC’s Risk Alert.
Form ADV Part 3 Conversation Starters
June 16, 2020
The filing and delivery deadline for the new Form CRS/Form ADV Part 3 relationship summary is fast approaching, and many investment adviser firms have not yet prepared the answers for the ADV Part 3 Conversation Starters which are included in the text of a Form ADV Part 3 relationship summary.
World Elder Abuse Awareness Day – What Investment Advisers Can Do to Protect Vulnerable Clients
June 12, 2020
June 15 is World Elder Abuse Awareness Day (WEAAD). WEAAD was launched by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations. The purpose of WEAAD is to provide an opportunity for communities around the world to promote a better understanding of abuse and neglect of older persons by raising awareness of the cultural, social, economic and demographic processes affecting elder abuse and neglect.
Under certain circumstances, an investment adviser firm registered with the U.S. Securities and Exchange (“SEC”) is not required to file/deliver the new Form ADV Part 3/CRS relationship summary.
On June 10, 2020 the State of Rhode Island’s Securities Division announced that investment adviser firms registered with the State of Rhode Island must file the Form ADV Part 3/Form CRS relationship summary before June 30, 2020. Click here to read Rhode Island’s Notice to Investment Advisers RE: Form CRS. This is significant because Rhode Island is now the second state securities regulator to require the filing of the Form ADV Part 3/Form CRS by a state-registered investment adviser firm. Previously, to the best of our knowledge, only the Oklahoma Department of Securities and SEC registered investment adviser firms with retail investors were required to file the Form ADV 3/Form CRS. (Regulatory Update: On June 19, 2020, the Oklahoma Department of Securities withdrew (effective immediately) its notice requiring investment adviser firms registered with Oklahoma to file the Form ADV Part 3/Form CRS.)
SEC Issues Cease-and-Desist Action for Insider Trading
June 08, 2020
On May 26, 2020 the United States Securities and Exchange Commission (“SEC”) filed an order instituting administrative cease-and-desist proceedings to a registered investment adviser and private equity firm for allegedly participating in insider trading. Click here to read the SEC’s Cease and Desist Order.
