CCLS Blog Spotlight

People surrounding computer regarding Cybersecurity

SEC Issues Risk Alert on Cybersecurity in Light of “WannaCry” Ransomware Attack

On May 17, 2017, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) released a Risk Alert discussing the recent ransomware cyberattack and providing two important protection steps firms should take.  In addition, the Risk Alert outlined that OCIE had observed certain “security practices, procedures, and controls” during their cybersecurity focused exams performed on broker-dealers, …

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CCLS Blog Spotlight

SEC Building, Washington, D.C.

High Profiled Risks Associated With Investment Advisory Firms

The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) has been issuing written Risk Alerts since 2011 that outline areas the SEC believes carry high risks for broker-dealers and investment advisers.  The areas covered in these alerts have included: Social Media Custody Whistleblower Protocols Cybersecurity Business Continuity Plan Due Diligence of Alternative Investments Outsourcing CCO …

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“SEC Expectations for Managing Retirement Accounts” Webinar Q&A

In April, Craig Watanabe, Sr. Compliance Consultant at Core Compliance & Legal Services, Inc. (“CCLS”), hosted an informative webinar, “SEC Expectations for Managing Retirement Accounts.” During the presentation, he discussed important considerations for the now delayed DOL Conflicts of Interest Rule, how the SEC’s ReTIRE Initiative impacts a firm’s compliance program, steps advisers can take …

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Applicability Date of Fiduciary Rule Delayed

On April 4, 2017, the Department of Labor (“DOL”) issued a news release announcing that they are extending the applicability date of their Conflicts of Interest Rule (commonly referred to as the “Fiduciary Rule”) for 60 days.  The release also extends the applicability dates of related exemptions, including the Best Interest Contract Exemption (BIC Exemption) and …

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DOL Issues Bulletin in Wake of Proposed Rule Delay

Following the proposed rule to delay the Department of Labor’s Conflicts of Interest Rule (the “DOL Rule), John Canary, the DOL’s Director of Regulations and Interpretations, issued a Field Assistance Bulletin announcing a temporary enforcement policy. This memorandum, which was sent to the Director of Enforcement and Regional Directors, was created to help ease concerns …

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No-Action Letter on Custody Pertaining to Standing Letters of Authorization

As a result of widespread confusion and uncertainty among investment advisers and other members of the financial industry, the Investment Adviser Association (IAA) sent a letter to the SEC’s Division of Investment Management requesting clarification and no-action relief pertaining to written Standing Letter of Authorization (SLOA) arrangements that allow investment advisers to give custodians instruction …

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Preparing for SEC Exams: Top Five Identified Deficiencies by the OCIE

In February 2017, the Securities and Exchange Commission (“SEC”) published a Risk Alert highlighting the top five most common compliance topics identified in deficiency letters issued to SEC registered investment advisers (“RIA”). Below is a list of topics and examples of deficiencies noted: Rule 206(4)-7 (the “Compliance Rule”) under the Investment Advisers Act of 1940 …

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SEC Fined 10 Firms for Violating Pay-to-Play Rule

In June 2010, the SEC adopted the Rule 206(4)-5 of the Investment Advisers Act of 1940, which addressed “pay-to-play” practices surrounding political contributions.  Pay to play is a term used in the financial industry that generally refers to investment advisers making campaign contributions to government officials with the intent to influence the award of contracts. …

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SEC Examination Priorities for 2017

Examination Priorities Each year the SEC Office of Compliance Inspections and Examinations publishes their SEC examination priorities letter to inform the industry of their current focus areas.  The 2017 letter was released on January 12, 2017, and is available on the SEC’s website.  The letter identified three thematic areas which were similar to 2016: Examining …

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California Attorney Defrauds EB-5 Investors

On December 27, 2016, the Securities & Exchange Commission (“SEC”) charged Emilio Francisco with defrauding investors seeking to participate in the EB-5 immigrant investor program. The EB-5 program, which is administered by the U.S. Citizenship and Immigration Service (“USCIS”), allows foreign investors to apply to permanently live and work in the U.S. by investing money …

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FINRA Announced Its 2017 Exam Priorities

According to Robert W. Cook, since becoming the president and CEO of FINRA in August 2017, he has “been engaged in an ongoing ‘listening tour’ meeting with member firms, regulators and investor groups, among others.”  In the cover letter he issued announcing the release of FINRA’s 2017 Regulatory and Examination Priorities Letter, Mr. Cook states …

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End of Year is Almost Here – Are You Prepared?

2016 is speeding to a close, so to assist advisory firms in preparing for year-end compliance requirements, along with certain upcoming regulations, CCLS recently published a Risk Management Update (“RMU”) that contains a year-end compliance checklist.  While it’s not all inclusive, the checklist is extensive and provides a risk management tip for each task listed. …

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