SEC

SEC Proposes Amendments to Require Hyperlinks to Exhibits in Filings

 

On August 31, 2016, the Securities and Exchange Commission proposed amendments that would require hyperlinks to exhibits in specified types of filings with the Securities and Exchange Commission. Press release. Proposed rule.

SEC Adopts Amendments Providing Authorities Access to Data Obtained by Security-Based Swap Data Repositories

 

On August 29, 2016, the Securities and Exchange Commission amended a rule designed to provide access for regulators to data in the security-based swap market.  The amendments were enacted to make the sharing of information more secure and efficient. Press release,

SEC Adopts Rules to Enhance Information Reported by Investment Advisers

 

On August 25, 2016, the Securities and Exchange Commission adopted amendments to rules and forms designed to improve disclosures provided by investment advisers to investors and the Securities and Exchange Commission. Press release.

SEC Seeks Public Comment on Disclosure Requirements Relating to Management, Security Holders and Corporate Governance Matters

 

On August 25, 2016, the Securities and Exchange Commission requested “public comment on disclosure requirements in Subpart 400 of Regulation S-K, including those relating to management, certain security holders, and corporate governance matters.” Press release.

SEC Adopts Amendments to Form ADV

 

On August 25,  2016, the Securities and Exchange Commission (SEC) adopted amendments to Form ADV that are designed to provide additional information regarding advisers, including information about their separately managed account business, incorporate a method for private fund adviser entities operating a single advisory business to register using a single Form ADV, and make clarifying, technical and other amendments to certain Form ADV items and instructions. The SEC also adopted amendments to the Investment Advisers Act of 1940 books and records rule.

In particular, the amendments to Part 1A of Form ADV are intended to provide a more efficient method for the registration on one Form ADV of multiple private fund adviser entities operating a single advisory business (“umbrella registration”). Although under existing staff guidance a large number of advisers have already been making umbrella registration filings, the method outlined in the staff guidance for filing an umbrella registration was limited by the fact that the form was designed for a single legal entity. These amendments are intended to eliminate confusion for filers and the public. Press release.

New Jersey Appellate Court Clarifies Definition of Compensation under Advisers Act

 

On August 12, 2016, the United States Court of Appeals for the Third Circuit affirmed the decision of the District Court of New Jersey and held in United States v. Everett C. Miller that the defendant was an “investment adviser” within the meaning of the Investment Advisers Act of 1940 (the “Advisers Act”), notwithstanding defendant’s arguments that he did receive “compensation” and was not engaged “in the business” of acting as an investment adviser.

The Advisers Act does not explicitly define “compensation” or what constitutes being engaged “in the business.”  Consequently, the Court of Appeals based its decision on a 1987 Release issued by the Staff of the Securities and Exchange Commission (Investment Advisers Release No. 1092) which states, in part: “The Staff considers a person to be ‘in the business’ of providing advice if the person . . . holds himself out as an investment adviser or as one who provides investment advice.” In reaching its decision that the defendant provided advice for “compensation,” the Court recognized that the Advisers Act also does not define “compensation.”  The Court again cited the SEC Release which defines compensation as “any economic benefit, whether in the form of an advisory fee or some other fee relating to the total services, rendered, commissions, or some combination of the foregoing . . .” and concluded that: “It is not necessary that an investor pay a discrete fee specifically earmarked as payment for investment advice.”  Opinion.

SEC Proposes Amendments to Update and Simplify Disclosure Requirements as Part of Overall Disclosure Effectiveness Review

On July 13, 2016, the Securities and Exchange Commission proposed amendments to various disclosure provisions in order to eliminate duplicative provisions and modernize the relevant requirements.   After the proposed amendments are published in the Federal Register, the comment period will be open for 60 days. Release. Proposed Rule.

SEC Proposes Rules to Enhance Order Handling Information Available to Investors

On July 13, 2016, the Securities and Exchange Commission proposed rules that “for the first time would require broker-dealers to disclose the handling of institutional orders to customers … [and] would expand the information included in existing retail order disclosures.” After the proposed rules are published in the Federal Register, the comment period will be open for 60 days. Release. Proposed Rule.