Given the current regulatory landscape, good intentions just aren’t good enough. Companies need to be actively protecting themselves and their personnel from liability.
The absence of simple disclosure in a licensing agreement about an Auto Hold feature for a volatility index managed by S&P Dow Jones Indices (S&P DJI) prompted the U.S. Securities and Exchange Commission (SEC) to take action, further establishing a framework for index providers.
Investment advisors are familiar with the need to have difficult conversations with clients. Any number of anticipated or unforeseen situations, such as the loss of a job or a serious family illness, can prompt the need to revisit a client’s investment plan and tailor their asset allocation plan to deal with significant life changes.
Much in the same way clients depend on your proven expertise to help meet their investment goals, advisors should seek and rely on the value that only specialized legal counsel can provide when mulling the business transition to a new firm or the start of a new business.
You have successfully formed your investment advisory firm and your business is up and running. Now you want to ensure that your firm remains in compliance with the SEC, FINRA and state regulators so that, in the event a regulatory agency DOES come knocking, you are ready to handle the examination.
When it comes to disclosure, it’s important to have more than one set of eyes review everything from marketing materials to Forms ADV to make certain all required language is included and nothing is overlooked. A recent regulatory filing underscores how a lack of disclosure and not having sufficient written policies and procedures in place to prevent such lapses can create unnecessary conflicts of interest, regardless of adviser intent.
Investment advisers should promptly review language used in mandated pre-dispute arbitration agreements in response to Regulatory Notice 21-16 recently issued by the Financial Industry Regulatory Authority (FINRA). The Notice serves as a cautionary yellow light for firms that may be inclined to limit investor protections by improperly including adviser-friendly terms that ignore specific FINRA disclosure requirements.
Professionals who work with “Plans”, as defined under the Employment Retirement Income Security Act of 1974 (ERISA), and for those that recommend certain investments to individual retirement accounts (“IRA”), such individuals must be mindful to update their firm’s policies and procedures now that the U.S. Department of Labor (DOL) is proceeding with the adoption of a fiduciary exemption that can impose restrictions upon and prevent fiduciaries from engaging in certain activities.
With greater scrutiny coming from the SEC, FINRA and state regulators, firms across the financial industry have turned to outsourced general counsel to assist with both regulatory compliance matters and traditional corporate counsel needs.
The first few months of 2021 have marked a clear shift in how the U.S. Securities and Exchange Commission (SEC) could soon start holding corporations to a much higher standard of accountability for actions that harm investors. A central theme of the SEC’s emerging mindset, as stated in a March 9, 2021, speech by Commissioner Caroline Crenshaw is the belief that corporate culture comes from the top and there is a strong need to incentivize companies to foster a culture of compliance, not misconduct.
- Support and Counsel to Boards of Directors, Board Committees and Executives
- Assembling the Right Legal Team for Your M&A
- The Regulatory Considerations for M&As and Transition Planning
- Financing, Capital, and Ownership Structures
- The Essentials of a Purchase and Sale Agreement
- What to Know About Your Mergers & Acquisitions Process
- Private Equity and Your Regulatory Compliance Counsel
- The Most Important Consideration When Starting a Business
- Starting Out: Mergers & Acquisitions – Term Sheets and Due Diligence
- Four P’s of the Breakaway and Transition Process
- Securities and Exchange Commission (SEC)
- Transition Services
- Investment Advisers
- Policies and Procedures
- Private Equity
- Private Funds
- Due Diligence
- Regulatory Examinations
- Social Media Marketing
- California Consumer Privacy Act (CCPA)
- Aging Clients
- Advisers Act
- Virtual Currency
- Ponzi Scheme
- Dodd-Frank Act
- Office of Compliance Inspections and Examinations (OCIE)
- Securities Law
- Broker Protocol
- Form U5
- Hedge Funds
- Regulation Best Interest
- Personally Identifiable Information (PII)
- Government Shutdown
- Risk Alert
- Exchange-Traded Funds (ETFs)
- Investment Company Act
- Rule 6c
- Wells Fargo