SEC Proposes Rule Changes Related to Custody of Client Assets What happened? On February 15, 2023, the SEC proposed rule changes intended to strengthen custody protections for client assets managed by RIAs. The proposed amendment and redesignation of the Custody Rule (Rule 206(4)-2), as the Safeguarding Rule (Rule 223-1), [...]
2023 SEC Examination Priorities: New Rules, Private Funds, Retail Investors and Working Families, ESG, Information Security, and Digital Assets What happened? On February 7, 2023, the SEC’s Division of Examinations (“EXAMS”) published its 2023 Examination Priorities. These annual priorities highlight practices, products, and services that present potentially heightened risks [...]
PTE 2020-02 Retrospective Reviews
SEC Proposes New Rule on Outsourcing by Investment Advisers What happened? On Wednesday, Oct. 26, 2022, the Securities and Exchange Commission (SEC) proposed a new rule and amendments regarding the due diligence of service providers. The proposal contains specific due diligence requirements that RIAs must fulfill when using third-party [...]
Electronic Communications Recordkeeping: SEC Examination Requests What happened? After landmark penalties against 16 Wall Street Firms, the message is clear: firms are expected to abide by the U.S. Securities and Exchange Commission’s (SEC) recordkeeping rules, especially around communication. Advisers’ use of electronic communications tools, such as text messaging, email, [...]
SEC Reopens Comment Periods for Cybersecurity, ESG, and More What happened? In a surprising development, the U.S. Securities and Exchange Commission (SEC) announced that they would reopen the comment period on specific rulemaking releases between June 2021 and August 2022. The extension is due to “a technological error that [...]
ESG Considerations for Investment Advisers
Evolving Cybersecurity Expectations: The SEC Proposes its First Comprehensive Cyber and Data Security Rules
SEC Fines Adviser in Wrap Fee Program Dispute What happened? On August 26, 2022, Kovack Advisors, Inc. (“KAI”) settled with the U.S. Securities and Exchange Commission (“SEC”) for almost $900,000 following an order by the SEC instituting administrative and cease-and-desist proceedings against KAI. KAI offered wrap fee programs to [...]
The SEC Adopts New Amendments to its Whistleblower Program What happened? On August 26, 2022, the Securities and Exchange Commission (SEC) adopted two amendments to the rules guiding its whistleblower program, according to a press release from the SEC. The new amendments further specify the circumstances in which a [...]