News – Compliance and Regulatory Alerts

Compliance and Regulatory Alerts  |  12-02-21

SEC Exam Division Issues Alerts on Robo-Advisory Services and IA Fee Calculations Upon Finding Deficiencies

This month, the SEC Division of Examinations issued two alerts based on staff findings from recent examination initiatives. The first concerned advisers that offer automated digital investment services to their clients. The initiative was based on increases in the number of advisers operating, recommending or sponsoring discretionary robo-investment services. The targeted examination revealed widespread disclosure and supervisory deficiencies in these services. The second risk alert was a follow-up to previously issued guidance on fee-related deficiencies, compliance and disclosure issues. This new alert is based on a national exam initiative focusing on the calculation of advisory fees charged to retail clients and the adequacy of fee disclosures.


Compliance and Regulatory Alerts  |  11-23-21

SEC FY2021 Enforcement Division Recap: Regulators Tout Expanded Scope and Impacts, Including “First-of-Their-Kind” Prosecutions

In a tally of enforcement actions taken in Fiscal Year 2021 (which ended September 30th), the SEC reported that its efforts “spanned the entire securities waterfront” to address emerging threats. The agency touted many “first-of-their kind enforcement actions” and “record-breaking achievements.” Among the emerging areas of prosecutorial interest, the SEC highlighted enforcement actions involving crypto, decentralized finance, SPACs, the “dark web,” Form CRS compliance, and unregistered electronic trading. The agency also highlighted (and linked to) “impactful” prosecutions against a host of entities.


Compliance and Regulatory Alerts  |  11-04-21

DOL Extends Non-Enforcement Compliance Relief for Certain Prohibited Transaction Exemptions

In a Field Assistance Bulletin issued on October 25, 2021, the Department of Labor extended relief through Jan. 31, 2022 on a Prohibited Transaction Exemption (“PTE”), titled "Improving Investment Advice for Workers and Retirees.” The exemption is offered to registered investment advisers, broker dealers, financial institutions, and insurance companies that “provide fiduciary investment advice to Retirement Investors.”


Compliance and Regulatory Alerts  |  10-21-21

FINRA Warns Firms to Pay Attention to FinCEN AML Priorities

On October 8, 2021, FINRA urged member firms to review and update their Anti-Money Laundering compliance programs in light of the Financial Crimes Enforcement Network’s recently published priorities on the subject. FinCEN came out with those priorities on June 30, 2021, in accordance with AML Act of 2020, which became law on January 1, 2021.


Compliance and Regulatory Alerts  |  09-14-21

FINRA Rules Addressing Brokers with Significant History of Misconduct Go Into Effect

New FINRA rules for protecting investors from brokers with a significant history of misconduct went into effect on September 1, 2021. The new rules, adopted on March 10, 2021, broaden authority to discipline associated persons, impose stricter supervision on firms, and mandate greater disclosure in various proceedings.


Compliance and Regulatory Alerts  |  08-17-21

Regulatory Alert: FINRA Exam Letter Targets Options Trading

On August 10, 2021, FINRA issued a targeted examination letter alerting firms that the regulator was conducting a review of all activities related to options accounts. In the new examination letter, FINRA requests information on account supervision, communications, and diligence from January 1, 2021, through August 10, 2021 (the date of the letter). Though the due date for the information has not yet been published, firms should begin working to formulate their responses immediately.


Compliance and Regulatory Alerts  |  07-27-21

SEC Charges 27 Financial Firms for Form CRS Filing and Delivery Failures

The Securities and Exchange Commission announced in a statement yeterday that “21 investment advisers and 6 broker-dealers have agreed to settle charges that they failed to timely file and deliver their client or customer relationship summaries – known as Form CRS – to their retail investors."


Bates Research, Compliance and Regulatory Alerts  |  06-30-21

FinCEN Issues First National AML/CFT Priorities

The Financial Crimes Enforcement Network (FinCEN) today issued the first government-wide priorities for anti-money laundering and countering the financing of terrorism (AML/CFT) policy.


Bates Research, Compliance and Regulatory Alerts  |  06-29-21

SEC Appoints New Jersey Attorney General Gurbir S. Grewal as Director of Enforcement

The Securities and Exchange Commission today announced that Gurbir S. Grewal has been appointed Director of the Division of Enforcement, effective July 26, 2021.


Compliance and Regulatory Alerts  |  04-21-21

With Increase in Options Trading, FINRA Issues Alert on Options Account Approval, Supervision and Margin Requirements

On April 9, 2021, FINRA issued guidance reminding members of their obligations on customer options accounts. The new alert flows from a reported increase in the opening of self-directed brokerage accounts and a broader risk of whether broker dealers and investment advisers are collecting information and performing adequate due diligence to ensure that options trading is appropriate for their customers. Additionally FINRA highlights compliance obligations on supervision, anti-money laundering and margin for customers seeking to trade options. In this Alert, Bates takes a look at the recently published guidance and what you need to know to stay in compliance.


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