SEC Chairman Jay Clayton announced on Saturday, January 26 that with an agreement reached to end the government shutdown, the “Commission has resumed normal staffing levels and is returning to normal operations.” In total, about 94% of the commission’s approximately 4,400 employees had been furloughed during the 35-day shutdown, according to its operations plan. In a … Continued

Advanced planning for a regulatory exam remains a vital step in ensuring the compliance team is prepared when the exam teams comes knocking. At the recent Ascendant/CSS fall conference in San Diego, Allison Fraser moderated the conference’s capstone session on the topic, joined by Bryan Bennett, the Associate Regional Director in the examination program in … Continued

The Compliance Program Rule continues to be a powerful tool for SEC enforcement, recently used by the SEC to address trading away in wrap accounts, misappropriation of retail client assets, and the misuse of an omnibus account. Advisory firms had written policies and procedures and testing protocols, but they were not good enough; are yours? … Continued

If you wanted more information about the contours of the SEC’s Pay-to-Play Rule, or how the SEC may enforce it, three recent Settlement Orders against large investment advisers for “over de minimis” political contributions provide some insight regarding one of the prohibitions: Contributions by Covered Associates to certain Government Officials over the specified Exception amount (capitalized words are terms in the … Continued

On July 11, 2018, the SEC issued a Risk Alert outlining commonly found compliance issues related to best execution by investment advisers. Advisers have an obligation to seek best execution of client transactions, taking into consideration quantitative factors such as execution quality and commission rate, as well as more qualitative factors such as the value … Continued

On the topic of SEC Deficiency Letters, if you have received one, you must promptly take corrective action. The SEC will not tolerate inappropriate delay. The SEC recently imposed an $8 million civil penalty on an adviser who, among other things, failed to promptly take corrective action in its Form ADV filing, following receipt of … Continued

The SEC quietly provided additional guidance to the industry about inadvertent custody in supplemental responses to the Custody Rule FAQs. In Question II.11 and II.12, the SEC stated that it would not recommend enforcement against an adviser that does not have a copy of a client’s custodial agreement, and does not know or have reason … Continued

On May 16, 2018, the SEC’s Office of Investor Education and Advocacy launched an educational website meant to demonstrate a fraudulent initial coin offering (ICO). The website, HoweyCoins.com mimics a bogus coin offering touting a too-good-to-be-true investment opportunity. The website features several of the features common to fraudulent offerings, including promises of guaranteed returns, complex … Continued

Are you ready for Form ADV Part 3? As if the last annual updating amendment filing was not tedious enough with all the additional information related to separately managed accounts, the process will further evolve with the SEC’s proposal for a Form ADV Part 3, also referred to as Form CRS. But don’t worry, it … Continued

 NOTE: Ascendant Director of Cyber IT Services E.J. Yerzak recently spoke at the AIM Summit in Abu Dhabi, a conference that targets alternative investment managers. The following is a brief summary of his key comments during his two sessions, “Primer on Crypto Currency, Distributed Ledger Technology and ICO’s,” and “Legal & Regulatory Insights/AML – Blockchain” … Continued