When investment advisers use the cloud, they are making a conscious, informed decision to outsource tasks to vendors who may have particular expertise or infrastructure in place to handle such tasks. From hosted email archiving to compliance reporting, and from hosted backups to client communication portals, moving data to the cloud can help many firms address business needs while enabling them to focus more on their core business – providing investment advice. However, the Securities and Exchange Commission has made it clear that while financial professionals can outsource processes, they cannot delegate the ultimate responsibility for the performance of those functions. After all, it is the investment adviser who is in the trusted position of a fiduciary with respect to the adviser’s clients.
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Evolution of Fiduciary Rules Begins to Take Shape in SEC
On April 18, 2018, the SEC voted to propose several new rules and reforms related to fiduciary standards. The package intends to raise and clarify standards of conduct for broker-dealers and investment advisers, and to provide clarity regarding fees, conflicts and other material matters. It also aims to ensure that the standards can be understood … Continued
Insurance Considerations for Investment Advisers
How much coverage is enough? What types of insurance policies do you need? Whether you are starting an investment advisory practice, launching a new line of business, or reevaluating your existing risks, there are critical questions to ask to make sure you understand the various ways to protect your firm. Join us for a practical … Continued
Fifth Circuit Weighs In on DOL Fiduciary Rule
A panel of the U.S. Court of Appeals for the Fifth Circuit has vacated the Department of Labor’s Fiduciary Rule. In a 2-1 split, the Fifth Circuit’s decision overrules a Dallas District Court’s decision, which had previously upheld the rule. Unfortunately, the decision does little to settle the fate of the beleaguered rule. Although it … Continued
SEC Proposes Amending Investment Company Liquidity Disclosures in Forms N-PORT and N-1A
On March 14, 2018, the Securities and Exchange Commission (“SEC”) proposed amendments to the mutual fund liquidity-related disclosure requirements. Specifically, the proposal: Adds a new requirement to “briefly discuss the operation and effectiveness of the Fund’s liquidity risk management program during the most recently completed fiscal year” in the Fund’s Management Discussion of Fund Performance … Continued
Paradigm Shift in SEC Exams, Benefits of a Mock Exam
For investment advisers currently going through an SEC exam, the process likely bears little resemblance to exams of old. Call it the new normal, a paradigm shift, or simply the effects of the SEC having to do more with less, but anecdotal evidence among those now experiencing the exam process suggests some interesting new trends. … Continued
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