On December 18, 2019, the SEC proposed amendments to the definition of “accredited investor” in the SEC’s rules and the definition of “qualified institutional buyer” (QIB) in Rule 144A under the Securities Act of 1933 (Securities Act).1 The amendments to the definition of “accredited investor” would add new categories of individuals and entities and make certain other revisions to the … Read More
SEC Reproposes Fund Derivatives Rule; Proposes New Sales Practices Rules Governing Trading In Certain Leveraged Investment Vehicles
“If at first you don’t succeed, try, try again.” – Thomas Palmer, American educator In 2015, the Securities and Exchange Commission (SEC) proposed a new rule 18f-4 under the Investment Company Act of 1940 (1940 Act) to regulate the use of derivatives by investment companies and business development companies, other than money market funds (collectively, funds). That proposal generated approximately … Read More
Philadelphia Office of Practus Co-Hosts “2020 Starting Line” Event
More than 50 financial advisers, fund managers, accountants, and attorneys attended an educational and networking event co-sponsored by Practus, LLP and accounting firm BBD LLP last month, with support from the Chartered Alternative Investment Analyst Association (CAIA). Partners Robert Elwood, John Grady, and John Ramírez spoke about topics related to funds, taxes, advisers, and brokers that will be important in … Read More
5 Year-End Tax Tips for 2019
Why not give yourself the gift of tax savings this holiday season? You have until December 31 to realize the benefits of these strategies: 1. Max out your IRA if you’re not retired. Whether you have a 401(k) or 403(b), saving the maximum allowed by the IRS not only sets you up for greater financial security in retirement, it reduces your taxable income … Read More
SEC Proposes Amendments to Investment Adviser Advertising and Solicitation Rules
On November 4, 2019, the Securities and Exchange Commission (SEC) proposed to amend its rules under the Investment Advisers Act of 1940 (Advisers Act) governing investment adviser advertisements and payments to solicitors, as well as related record-keeping requirements.1 The SEC also proposed to amend Form ADV in order to obtain additional information regarding advisers’ advertising practices. The proposed amendments to … Read More
SEC Staff Extends SIFMA No-Action Letter for 3 Years
On November 4, 2019, the Division of Investment Management (IM) of the Securities and Exchange Commission (SEC) issued a no-action letter (2019 Letter) to the Securities Industry and Financial Markets Association (SIFMA)1 extending by three years the term of a previous no-action letter that IM issued to SIFMA (2017 Letter).2 The 2017 Letter enabled broker-dealers to accept hard dollar payments … Read More
SEC Issues New ETF Rule and Adopts Form Amendments
On September 25, 2019, the Securities and Exchange Commission (SEC) adopted a new rule under the Investment Company Act of 1940 (1940 Act) as well as amendments to registration forms and data collection forms.1 New rule 6c-11 under the 1940 Act is intended to enable most transparent exchange-traded funds (ETFs), whether passive or actively managed, to operate without the need … Read More
IM Issues ADI Highlighting Fee and Performance Issues
On October 2, 2019, the Division of Investment Management (IM) of the Securities and Exchange Commission (SEC) issued disclosure guidance (so-called accounting and disclosure information) addressing the accuracy of performance, fee and expense figures presented in prospectuses.1 The guidance encourages registrants to verify the accuracy of performance and fee disclosures before those disclosures are filed with the SEC and provided … Read More
FINRA Notice Addresses Disclosure Innovations in Advertising and Other Public Communications
On September 19, 2019, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 19-31 – Disclosure Innovations in Advertising and Other Communications with the Public (RN 19-31). RN 19-31 supplements past FINRA guidance on the application of the communications rules to social media and electronic communications. It responds to questions that FINRA has received from members about how they can … Read More
Read Ethan Corey’s article in the September edition of The Investment Lawyer
“The Dog That Didn’t Bark: Investment Research, Hard Dollars and Special Compensation under the Investment Adviser Act of 1940” On October 26, 2017, the SEC staff issued three no-action letters intended to facilitate the ability of registered investment advisers and broker-dealers to comply both with the requirements of the Investment Advisers Act of 1940 (Advisers Act) and with the requirements … Read More