The SEC, by a 3-1 party line vote, issued in a timely fashion its final regulations with respect to broker-dealer conduct, referred to as Regulation Best Interest ("Regulation BI"). The SEC's...
Investment Management
IRS Releases Round Two of Proposed Regulations for Qualified Opportunity Funds
On April 17, 2019, the Internal Revenue Service ("IRS") issued the second round of proposed regulations with respect to qualified opportunity funds ("QOFs"). While the first round of proposed...
U.S. Supreme Court Finds Non-“Makers” Can Violate Rule 10b-5
On March 27, 2019, the U.S. Supreme Court ruled in Lorenzo v. SEC, No. 17-1077 (U.S. Mar. 27, 2019) that a party who is not a “maker” under Securities and Exchange Commission Rule 10b-5(b) can...
Nevada Issues Proposed Regulations Regarding Fiduciary Standards
While the SEC works on finalizing its proposed Regulation Best Interest, there continues to be significant activity at the state level that will cover, in varying degrees, the same subject matter....
OCIE Identifies Common Deficiencies Relating to Best Execution
On July 11, 2018, the Office of Compliance Inspections and Examinations ("OCIE") of the Securities and Exchange Commission published a Risk Alert relating to best execution deficiencies on the part...
Recent DOL Settlement Agreements with ESOP Trustees
The spate of recent settlements between the U.S. Department of Labor ("DOL") and trustees of employee stock ownership plans ("ESOP") is a signal that trustees and other fiduciaries should reassess...
Recent FINRA Notices Seek Comment on Proposed Amendment to Quantitative Suitability and Efficacy of Supervision Rule
On the heels of the Security and Exchange Commission's (the "Commission") April 18, 2018 release of the proposed Regulation Best Interest rule package ("Regulation BI") (which was covered in our...
DOL Issues Temporary Enforcement Policy with Respect to Investment Advice Fiduciaries
Today, the Department of Labor ("DOL") issued Field Assistance Bulletin 2018-02 (the "FAB"), which indicates that both the DOL and the IRS will continue to rely upon its previously announced...
Another Win for the Plan Fiduciary – Fifth Circuit Follows Dudenhoeffer Standards in RadioShack Case
On February 6, 2018, the Court of Appeals for the Fifth Circuit in Singh v. RadioShack Corp. aligned with the Second Circuit and affirmed the dismissal of Plaintiffs' proposed class action. The...
SEC Proposes Three Related Releases on Retail Investor Matters
I. Introduction After a delay of almost eight years from the date that the SEC is authorized under the Dodd-Frank Act to provide for fiduciary standards for broker-dealers and investment advisers,...
FINRA Rules Going into Effect in 2018
There are a host of new and amended rules promulgated by the Financial Industry Regulatory Authority ("FINRA") that will be going into effect throughout 2018. This Alert summarizes these impending...
Massachusetts Securities Division Files Suit to Enforce Fiduciary Rule
In a recent Alert, we discussed how several states are charting their own course while the U.S. Department of Labor ("DOL") proceeds with its review of the Fiduciary Rule, the Best Interest Contract...
SEC Offers Amnesty Under Share Class Selection Disclosure Initiative
In our January 18, 2018 Law Alert on share class selection, we expressed our opinion that share class selection is likely to remain an enforcement focus for the Security and Exchange Commission (the...
Tax Reform: Unintended Consequences for Broker-Dealers
The "Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018" (the "Tax Act") - formerly known as The Tax Cuts and Jobs Act -...
Recent Developments – States Proceed with Their Own Fiduciary or “Best Interest” Standards
States Proceed with Their Own Fiduciary or "Best Interest" Standards While the U.S. Department of Labor ("DOL") continues with its mandated review of the Fiduciary Rule and related exemptions,...
Regulatory Focus on Share Class Selection in 2018
In recent years, the Office of Compliance Inspections and Examinations ("OCIE") of the Security and Exchange Commission ("Commission") has increasingly scrutinized share class selection by...
FINRA Shares Examination Findings
The Financial Industry Regulatory Authority (FINRA) recently released the results of its exam program to assess compliance with securities rules and regulations. FINRA conducts cyclical examinations...
FINRA’s New Qualification and Registration Rules Effective October 1, 2018
Last month, the Securities and Exchange Commission (SEC) approved a new set of rules proposed by the Financial Industry Regulatory Authority (FINRA) intending to consolidate and simplify...
Calculating Regulatory Assets Under Management
A question we frequently receive from our advisory firm clients is whether they are accurately calculating and reporting regulatory assets under management ("RAUM"). RAUM, as a metric, was first...
BICE and Related Exemptions: Limiting Your Liability Until Full Implementation
Background - Transition Period May be Extended Until July 1, 2019 The DOL recently proposed to extend the transition period by 18 months (i.e., from January 1, 2018 to July 1, 2019) for the full...
Cybersecurity Guidance Update from SEC
On April 28, 2015, the SEC Division of Investment Management issued guidance with regard to cybersecurity issues for both registered investment companies and registered investment advisers. (IM...