OCIE Publishes Examination Priorities for 2020 (updated)

The SEC’s Office of Compliance Inspections and Examinations (OCIE) has issued its official 2020 Examination Priorities document. Areas of focus include retail investors (especially seniors), the SEC Fiduciary Duty Interpretation and Form CRS, cybersecurity and data privacy, financial technology, RIA compliance programs, mutual funds and ETFs, and more. This article looks at OCIE’s 2020 examination priorities for investment advisers in detail.
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SEC’s Asset Management Advisory Committee Addresses Challenges in Evolving Industry at Inaugural Meeting

At the first meeting of the SEC’s new Asset Management Advisory Committee (AMAC), AMAC Chair Edward Bernard, Senior Advisor to IAA member T. Rowe Price, addressed three distinct but related topics: (i) evolution of asset management and value proposition; (ii) evolution of public and private securities markets; and (iii) globalization of asset management.
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In Memoriam: Longtime IAA Leader David Tittsworth

Tittsworth__David_LR_4x5.jpgIt is with profound sadness that we announce the passing of former IAA President & CEO David Tittsworth. David, who had been in treatment for multiple myeloma, died on January 8. David will be remembered as a passionate, dedicated, articulate, and effective advocate for the investment advisory community and for the importance of fiduciary advice. Because of his caring nature and close involvement with members, many of you knew David personally and collaborated with him on IAA projects. Our organization – indeed, the entire investment advisory community – owes a great debt of gratitude to David.
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Takeaways for Advisers from SEC FAQs on Regulation Best Interest

The SEC staff has issued its first round of frequently asked questions (FAQs) on Regulation Best Interest for broker-dealers. Although the FAQs do not directly address SEC-registered investment advisers’ obligations under the June 2019 Fiduciary Interpretation, the FAQs shed some helpful light on Form CRS and account type selection, as well as practices that advisers could consider in complying with conflicts of interest disclosure and the fiduciary interpretation.
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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.
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SECURE Act Issues for Investment Advisers

By Kathy D. Ireland, K.D. Ireland Consulting*

The SECURE (“Setting Every Community Up for Retirement Enhancement”) Act was passed by Congress on December 19, 2019, and signed into law by President Trump on December 20, as part of the end-of-year spending measure.  Designed to boost retirement savings, the SECURE Act will affect individual savers as well as employer plans and the financial institutions, including investment advisers that advise these plans. Many of the SECURE Act provisions became effective on January 1, 2020; therefore, investment advisers may need to review their clients’ existing savings arrangements immediately.  This article summarizes the key changes that advisers should review for their individual clients’ savings arrangements, and consider new potential retirement savings vehicles and incentives for employer plans.
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FinCEN Issues Limited Extension of FBAR Filing Deadline to April 15, 2021

The Financial Crimes Enforcement Network (FinCEN) has extended the deadline for certain FinCEN Form 114-FBAR (Report of Foreign Bank and Financial Accounts) filings to April 15, 2021. Specifically, the deadline has been extended for certain individuals with signature authority over (but no financial interest in) certain types of accounts
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Supreme Court Leaves SEC's Pay-to-Play Rule Intact

The Supreme Court has declined to review a 2019 D.C. Circuit ruling affirming the SEC’s power to regulate pay-to-play practices and rejecting state parties’ efforts to set aside the SEC’s Pay-to-Play Rue, (Advisers Act Rule 206(4)-5). The state parties’ petition claimed that the rule exceeds the SEC’s statutory authority and violates the Administrative Procedures Act and the First Amendment.
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Second Circuit Insider Trading Decision Likely to Make Criminal Convictions Easier

The Second Circuit issued an opinion in United States v. Blaszczak (Dec. 30, 2019), affirming wire fraud, securities fraud, and conversion of property convictions against defendants who had misappropriated and shared a government agency’s confidential information relating to a contemplated rulemaking, and against the “tippees” who had traded on that information.This case may make it easier, at least in the Second Circuit, for the Department of Justice to secure a criminal insider trading conviction than for the SEC to win a civil case charging the same conduct.
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Neil Simon
IAA Vice President for Government Relations
IAA Urges Tax Writers to Make Advisers Eligible for 20 Percent Pass-Through Deduction

In a letter to leadership of the House and Senate tax writing committees, the IAA and allied organizations have urged lawmakers to make investment advisers and other financial advisors eligible for the 20 percent pass-through deduction created by the 2017 Tax Cuts and Jobs Act.

The December 19 letter was sent to House Ways and Means Committee Chairman Richie Neal (D-Mass.), Ranking Member Kevin Brady (R-Tex.), Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Or.).
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SEC, CFTC Budgets Increased; SECURE Act Becomes Law

The budgets of both the SEC and CFTC will be significantly increased under the FY 2020 federal spending bill that President Trump has signed into law. The SECURE Act, designed to boost retirement savings, was added to the spending measure.
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Rep. Brad Sherman Elected Chairman of Capital Markets Subcommittee

The House Financial Services Committee has announced that Congressman Brad Sherman (D-Calif.) has been elected as chairman of the Subcommittee on Investor Protection, Entrepreneurship and Capital Markets.

Sherman replaces Congresswoman Carolyn Maloney, who stepped down as chair of the subcommittee on November 20, upon assuming the helm of the House Committee on Oversight and Reform. She succeeded Rep. Elijah Cummings (D-Md.) who passed away on October 17.
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Regulatory Proposals

See Updated 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.

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