To summarize the U.S. Securities and Exchange Commission Division of Examinations’s recently published 2021 examination priorities.
Abstract
Purpose
To summarize the U.S. Securities and Exchange Commission Division of Examinations’s recently published 2021 examination priorities.
Design/methodology/approach
Features short summaries of select aspects of the SEC Division of Examinations’ recently published 2021 examination priorities.
Findings
The SEC’s priorities for 2021 examinations include retail investor protection; information security; operational resiliency; financial technology and innovation, including digital assets; anti-money laundering; LIBOR transition, and selected areas for registered investment advisers.
Practical implications
Firms should consider the SEC examination priorities as they conduct their annual reviews of policies, procedures and business activities. Where firms observe deficiencies in their own practices, adjustments should be made before they find themselves the subject of an SEC investigation, examination or enforcement action.
Originality/value
Practical guidance for investment advisers, investment companies, municipal advisors, and broker-dealers from experienced broker-dealer, securities and investment management lawyer.
Details
Keywords
Matthew T. Wirig and Kate S. Poorbaugh
To summarize guidance from the Securities and Exchange Commission’s (“SEC”) Division of Investment Management regarding Rule 206(4)-2 (the “Custody Rule”) under the Investment…
Abstract
Purpose
To summarize guidance from the Securities and Exchange Commission’s (“SEC”) Division of Investment Management regarding Rule 206(4)-2 (the “Custody Rule”) under the Investment Advisers Act of 1940.
Design/methodology/approach
This article summarizes the SEC’s guidance on “inadvertent custody” created by broad authority in custodial agreements, custody created by standing letters of instruction, and adviser authority to transfer funds or securities between two or more of a client's accounts.
Findings
This article concludes that firms should review their existing client custodial agreements, standing letters of instruction and other arrangements carefully to determine whether they have custody and whether additional action is necessary.
Originality/value
This article contains information on the Custody Rule and related SEC guidance from experienced securities and financial services regulatory lawyers.
Details
Keywords
Matthew T. Wirig and Kate S. Poorbaugh
To summarize recent FINRA guidance on social media and digital communications published in Regulatory Notice 17-18.
Abstract
Purpose
To summarize recent FINRA guidance on social media and digital communications published in Regulatory Notice 17-18.
Design/methodology/approach
The intention was to provide a brief summary of the recent FINRA guidance on social media and digital communications published in Regulatory Notice 17-18 along with previous guidance in Regulatory Notices 10-06 and 11-39.
Findings
The new guidance focuses on a number of areas of digital communications including text messaging, personal communications, hyperlinks and sharing, native advertising, testimonials and endorsements, correction of third-party content and BrokerCheck links.
Practical implications
Firms should review this new guidance alongside existing FINRA guidance and their current social media and digital communications practices. Where firms observe deficiencies in their existing practices, adjustments should be made before they find themselves the subject of a FINRA investigation, examination or enforcement action.
Originality/value
Practical explanation by experienced financial services lawyers.
Details
Keywords
– To summarize the Financial Industry Regulatory Authority, Inc. (“FINRA”) 2015 Regulatory and Examinations Priorities Letter.
Abstract
Purpose
To summarize the Financial Industry Regulatory Authority, Inc. (“FINRA”) 2015 Regulatory and Examinations Priorities Letter.
Design/methodology/approach
Provides a brief summary of the general compliance and supervisory challenges described by FINRA. Highlights key sales practice concerns raised by FINRA. Briefly summarizes FINRA’s 2015 key financial and operational priorities. Summarizes FINRA market integrity focuses for 2015. Encourages firms to consider the FINRA 2015 regulatory and examination priorities alongside the Securities and Exchange Commission (the “SEC”) examination priorities for 2015 as they review their policies, procedures and business activities.
Findings
FINRA’s 2015 Regulatory and Examinations Priorities Letter focuses on: key areas FINRA has observed contributing to member firm compliance and supervisory deficiencies, its observation of an increase in firms failing to file timely responses to information requests in connection with examinations and investigations, key sales practice issues, financial and operational issues, and market integrity matters.
Practical implications
Firms should review these priorities alongside the SEC’s examination priorities for 2015. Where firms observe deficiencies in their own practices, adjustments should be made before they find themselves the subject of a FINRA or SEC investigation, examination or enforcement action.
Originality/value
Practical explanation by experienced financial services lawyer.