SEC

SEC Adopts Rules and Interpretations to Enhance Protections and Preserve Choice for Retail Investors in Their Relationships with Financial Professionals

 

The U.S. Securities and Exchange Commission (SEC) adopted and clarified a number of rules intended to improve the relationships between retail investors, investor advisers and broker-investors, while also maintaining retail investors’ access to investment services and products. Under Regulation Best Interest, broker-dealers must act in the best interest of a retail customer when recommending any securities transaction or investment strategy. The Form CRS Relationship Summary requires registered investment advisers and broker-dealers to provide retail investors with easily comprehensible information about their relationship with their financial professional. Lastly, the SEC clarified investment advisers’ fiduciary duties and the activities that trigger a broker-dealer to be considered an investor adviser under the Advisers Act. Press Release. For further detail on the subject, read an analysis from Orrick’s Securities Litigation team here.

SEC Obtains Emergency Order Halting Alleged Diamond-Related ICO Scheme Targeting Hundreds of Investors

 

On May 21, the Securities and Exchange Commission (SEC) announced that it obtained a court order halting an ongoing $30 million Ponzi Scheme. The SEC complaint charged a cryptocurrency business and its principal with using investor funds to run a Ponzi Scheme. Release.

SEC Modifies Timing for Filing of Non-Public Form N-PORT Data

 

On February 27, the Securities Exchange Commission (SEC) modified the submission deadlines for registered investment companies filing non-public monthly reports on Form N-PORT. Form N-PORT is a new form for reporting both public and non-public fund portfolio holdings to the Commission in a structured data format. As a result of today’s changes, rather than filing non-public monthly reports with the Commission within 30 days after each month-end, funds will be required to maintain the relevant information in their records and file all three monthly reports with the Commission no later than 60 days after the end of each fiscal quarter. Release.

SEC Adopts Final Rules for Disclosure of Hedging Policies

 

On December 18, “[t]he Securities and Exchange Commission (“SEC”) [] approved final rules to require companies to disclose in proxy or information statements for the election of directors any practices or policies regarding the ability of employees or directors to engage in certain hedging transactions with respect to company equity securities.” Release.

SEC Adopts Rule of Practice 194

 

On December 19, the Securities and Exchange Commission (“SEC”) published its adoption of Rule of Practice 194, which, generally speaking, “creates a transparent, efficient, and comprehensive process for a registered security-based swap dealer or major security-based swap participant, collectively known as SBS Entities, to apply to the Commission for relief from the statutory disqualification prohibition found in Exchange Act Section 15F(b)(6).” Release.