Celebrating David Tittsworth

The investment advisory profession lost one of its most influential voices, and the IAA lost a beloved leader, when our former President & CEO David Tittsworth passed away on January 8. Since his passing, the outpouring of grief for David has been overwhelming – clearly, he touched many of us in a profound, positive and lasting way. The flood of emails and phone calls the IAA has received is a testament to how much David was loved and respected. Here, we’re sharing some of the many tributes we’ve received.
<< more >>


IAA Comments on SEC’s Advertising and Solicitation Proposals

The IAA has submitted a comment letter in response to the SEC’s proposed amendments to the rules addressing investment adviser advertisements and payments to solicitors. As we note in our letter to the SEC, any amendments to these rules will undoubtedly have a profound impact on investment advisers – in most cases on a daily basis.

These proposals are an important first step by the SEC towards improving the regulatory framework in these areas and address many themes and issues the IAA has raised.  However, certain elements of the proposals – if adopted as-is – would likely impose significant operational and compliance burdens and unduly impede important communications with investors, particularly existing clients
<< more >>


SEC Publishes Additional FAQs on Form CRS

FAQs.jpgThe SEC staff recently published additional FAQs addressing several issues relating to new Form CRS which, beginning in July 2020, investment advisers and broker-dealers will need to provide to retail investors. The SEC published its initial Form CRS FAQs, addressing formatting and delivery requirements, last November. The new FAQs address two requests the IAA had submitted for clarification.
<< more >>


proxy.jpgIAA Objects to SEC’s Proxy Advice Proposal

Urges SEC to Address Infrastructure, Not Proxy Advisory Firms

The IAA has submitted a comment letter in response to the SEC’s proposal regarding proxy voting advice, expressing our disappointment that the Commission is focusing on proxy advisory firms, where there is no compelling evidence for a rulemaking, instead of proxy infrastructure, which is in need of urgent attention.
<< more >>


SEC Investor Advisory Committee: Revise, Republish Proxy Proposals

Commissioner Roisman Addresses Criticisms in Recent Speech

The SEC’s Investor Advisory Committee (IAC) responded strongly to the SEC’s proposals regarding proxy voting advice and shareholder proposals. In a 10-5 vote, with two abstentions, the IAC made recommendations similar to those made by the IAA in its comment letter on the proposals.
<< more >>



Kelli A. Haugh,
Managing Director,

Form CRS Implementation Considerations

By Kelli A. Haugh, Managing Director, Foreside*

The Securities and Exchange Commission (“SEC”) last June adopted new rules requiring investment advisers to prepare and deliver a client relationship summary (“Form CRS”) that provides information about their investment-related services, fees, and conflicts of interest. Form CRS, also referred to as Form ADV Part 3, applies to firms who have, or offer services to, retail investors and must be filed with the SEC by June 30, 2020. The SEC has recently emphasized the importance of Form CRS by including it as one of its examination priorities for this year, saying it will include in its examination assessments the content and delivery of Form CRS, as well as policies and procedures regarding conflicts disclosures.
<< more >>

Compliance Considerations in an RIA Merger or Acquisition

By Robert "Bob" Lavigne, David Birnbaum and Hank Sanchez
Managing Directors, Bates Compliance Team

Robert Lavigne

Mergers and acquisitions of registered investment advisers set new records in 2019 with the number of deals reportedly exceeding 200 for the year. Driving these consolidations is a fragmented industry of over 11,000 RIAs, continuing downward pressure on fees, a demanding regulatory environment that increases compliance costs, and rapid advances in financial technology that offer both great opportunity, but at potential cyber and privacy cost.

The case to consolidate in today’s market is strong. The backdrop, however, includes changes to the regulatory framework and how best to protect retail investors while ensuring a marketplace that works for advisers and brokers. For those considering a merger or acquisition, failure to account for the practical and future implications of these regulatory changes is a mistake that can impact their best effort.
<< more >>


Compliance Training: A Marathon Without a Finish Line

By Matthew Bromberg and Jenna Burch, Dorsey & Whitney LLP* 

Matthew Bromberg
Dorsey & Whitney LLP

Registered investment advisers are required by law to develop and follow written compliance policies and procedures that are reasonably designed to prevent violations of law and protect clients. As the responsibility to maintain compliance with SEC rules and regulations rests on all associates and supervised persons, and not only the Chief Compliance Officer (CCO), providing compliance training to all personnel is critical and contributes to a compliance and business culture where legal, ethical practices are the norm.
<< more >> 


Mike Oppe
Senior Vice President
Chubb Insurance
A Primer on the Difference Between Cyber and Financial Institution Fidelity Bond Insurance Policies

By Mike Oppe, Senior Vice President, Financial Institutions, Chubb Insurance*

The annual Investment Management Compliance Testing Survey results for each of the last six years (2014-2019) rank cybersecurity as the “hottest compliance topic” scored by respondents. The survey also points to an increasing uptake in the purchase rate of cyber insurance policies, increasing from 33 percent in 2016 to 66 percent in 2019. We continue to observe a significant amount of confusion regarding the perils covered by cyber policies versus other policies, particularly the fidelity bond.

A key step to sorting out the confusion is understanding what type of perils are covered and where, with a goal of achieving a more comprehensive insurance risk transfer solution.
<< more >>

LIBOR Update– ARRC Creates Transition Checklist for Asset Managers, Owners

The Federal Reserve Board’s Alternative Reference Rates Committee (ARRC) has created a checklist to assist asset managers and asset owners with issues raised by the transition from LIBOR to the ARRC’s recommended alternative, the Secured Overnight Financing Rate (SOFR). The checklist covers 10 key areas where action is needed, including, governance, risk management, exposure identification, communications, contractual remediation, and technology readiness.
<< more >>


NASAA Requests Comment on Proposed IAR CE Requirement

The North American Securities Administrators Association, Inc. (NASAA) has requested comment on a proposed continuing education requirement for investment adviser representatives (IAR CE). It would apply to IARs associated with SEC- and state-registered investment advisory firms who are registered in states that adopt IAR CE. NASAA is proposing an annual IAR CE requirement of 12 total credits, with each credit including at least 50 minutes of educational instruction.
<< more >>


SEC Fines Adviser for Failing to Establish and Enforce Restricted List Policies and Procedures

The SEC has censured and fined a Wyoming-based investment adviser $150,000 for failures in connection with its written policies and procedures to prevent the misuse of material nonpublic information (MNPI Policy).
<< more >>


SEC to Provide Exemption for Approval of Sub-Advisory Agreements from In-Person Board Meeting Requirements Under the Investment Company Act

The SEC plans to issue an order exempting a series of mutual funds and the funds’ investment adviser from the Investment Company Act’s requirement for board members to meet in person approve and materially amend sub-advisory agreements in person. Instead, board members could approve these agreements “by any means of communication that allows them to hear each other simultaneously during the meeting.”
<< more >>


IRS Provides Relief for RMD Notifications in Connection with the SECURE Act

Because of the short time after the December enactment of the SECURE Act that financial institutions had to update their systems, the IRS has provided relief asserting that, if a financial institution sent an RMD statement to an IRA owner who will turn 70 ½ in 2020, the IRS will not consider the RMD statement to have been provided incorrectly, as long as the IRA owner is notified by the financial institution no later than April 15, 2020 that no RMD is required for 2020.
<< more >>



Neil Simon
IAA Vice President for Government Relations
Jackson Departing SEC Commission; Crenshaw to be Nominated as Successor?

SEC Commissioner Robert J. Jackson, Jr. announced that he will be stepping down from his post on February 14, giving Republicans a 3-1 majority until the vacancy is filled. According to Reuters, Senate Minority Leader Chuck Schumer (D-NY) had formally requested that the White House nominate Caroline Crenshaw – currently a counsel to Commissioner Jackson – to succeed him.
<< more >>


Financial Service Committee Leaders Blast Lack of Diversity on SEC Advisory Committees

Congresswoman Maxine Waters (D-Calif.), Chair of the House Financial Services Committee, and Congresswoman Joyce Beatty (D-Ohio), Chair of the Subcommittee on Diversity and Inclusion, sent a letter on January 14 to SEC Chairman Jay Clayton expressing concerns about the ongoing lack of ethnic and racial diversity on the agency’s four advisory committees, including the newest 23-member Asset Management Advisory Committee, which includes no black committee members.
<< more >>


Could RETIRE Act Follow SECURE Act?

With passage of the SECURE Act, there is growing interest in gaining introduction in Congress of the RETIRE Act, which would allow electronic delivery of information about retirement accounts.
<< more >>



Regulatory Proposals

See Upcoming Regulatory Proposals

Compliance Dates

See Upcoming Compliance Dates

IACCP Certification & Training

See the 2020 Training Schedule




In what’s become a regular presentation at the IAA Compliance Conference, SEC Co-Deputy Director of OCIE Daniel Kahl (center) and Enforcement Co-Director Stephanie Avakian (right) outlined their exam and enforcement priorities for 2019 to IAA General Counsel Gail Bernstein.

Fiduciary is the most important word that retail investors don't understand. Here’s how average investors answered the question: “What’s a Fiduciary?

It's not active vs. passive… it’s active and passive. These experts explain why active management is crucial for investors and the markets.