February 12, 2018: Investment advisers recommending mutual fund shares to advisory clients may have a disclosure problem. And yes, the U.S. Securities and Exchange Commission (“SEC”) is here to help address the problem. Yesterday the Commission announced its new self-reporting initiative, the Share Class Selection Disclosure Initiative (“SCSD Initiative”), to provide relief to advisers that have engaged in improper mutual fund recommendations on behalf of their clients. This initiative, forgiveness if you will, relates to certain mutual fund share class selections made by advisers relative to the formulation and execution of investment advice. If the offending firm promptly fesses up to the Division of Enforcement and promptly returns any non-compliant fees to harmed clients, the Division will agree not to recommend financial penalties against such advisers for violating federal securities laws. Read More
February 7, 2018: We wish our clients and colleagues a very prosperous new year and, this being the kickoff of 2018, we are all once again bestowed with the SEC National Exam Program Examination Priorities for the coming year! We believe this informal guidance, announced February 7, 2018, can be helpful to Chief Compliance Officers as they recalibrate their compliance programs to adjust for business model evolutions or to realign their own compliance priorities following the 2017 annual review.
The following is a synopsis of the 2018 SEC examination priorities, abridged to present content pertaining primarily to investment advisers. The strategy and principles content has been extracted directly from the release to provide appropriate context to the Commission’s strategic and tactical execution of their mission. Read More