Series 82

Exam Alert: SEC modifies accredited investor standard based on Dodd-Frank

The SEC has changed its net worth standards for accredited investors to conform to provisions of the Dodd-Frank Act. The change stipulates that the value of an investor’s primary residence may not be used when calculating net worth to determine whether the person is an accredited investor on the basis of having a net worth of over $1 million. The change will be effective 60 days after publication in the Federal Register. Continue reading

An accredited investor is allowed to participate in certain unregistered limited private offerings. This SEC website shows the standards that determine who qualifies as an accredited investor.

Source: SEC Release 2011-274

This alert applies to the Series 6, Series 7, Series 24, Series 62, Series 79, and Series 82.

Exam Alert: SEC requires private fund advisers to file Form PF

A new SEC rule requires investment advisers with at least $150 million in private fund assets under management to periodically file Form PF. Large private fund advisers are required to file more frequently and to provide more detailed information than small private fund advisers. Most private advisers must begin filing December 15, 2012. Private advisers with $5 billion or more in private fund assets must begin filing June 15, 2012.

Source: SEC Release 2011-226

This alert applies to the Series 65, 66, 24, 62, and 82.

Exam Alert: FINRA provides guidance on TIPS fund advertising

On October 27, 2011, FINRA provided guidance on its rules that govern communications with the public regarding Treasury Inflation-Protected Securities (TIPS) funds. Specifically, if a TIPS fund’s current yield is adjusted monthly based on changes in the inflation rate, communication must explain that these changes can cause the yield to vary greatly from month to month. If an advertisement includes an unusually high current yield, “the material must disclose that the yield is attributable to the rise in the inflation rate, which might not be repeated.” Continue reading

Source: FINRA Regulatory Notice 11-49

This alert is relevant to the Series 6, 7, 24, 26, 62, and 82.

Exam Alert: FINRA provides guidance on the use of FINRA in firm trademarks

On October 27, 2011, FINRA provided guidance on its rules that govern communications with the public regarding indicating FINRA membership. Specifically, FINRA stated that firms and associated persons may not use FINRA’s trademark in the firm’s or individual’s trademark. The firm’s or individual’s trademark also must not include references to FINRA membership. Continue reading

Source: FINRA Regulatory Notice 11-49

This alert is relevant to the Series 6, 7, 24, 26, 62, and 82.

Exam Alert: FINRA provides guidance on ETF and DPP advertising

On October 27, 2011, FINRA provided guidance on its rules that govern communications with the public regarding exchange-traded products. Specifically, FINRA reminded firms that research reports on exchange-traded funds (ETFs) must filed with FINRA within ten days of first use. FINRA also reminded firms that firms must file sales literature for direct participation programs (DPPs). Continue reading

Source: FINRA Regulatory Notice 11-49

This alert is relevant to the Series 6, 7, 24, 26, 62, and 82.

Exam Alert: SEC gives guidance on cyber attack threat disclosure

On October 13, 2011, the Securities and Exchange Commission issued new guidelines that clarify the application of existing disclosure rules. Specifically, the SEC has identified cyber attack incidents, along with the risk of cyber attacks, as material information that must be disclosed to investors. Continue reading

Source: CF Disclosure Guidance: Topic No. 2

Further reading: “SEC tells companies to disclose cyber attacks”

This alert applies to the Series 24, 26, 55, 6, 62, 63, 65, 66, 79, 82, 99, and 7.

Exam Alert: Private fund advisers may be required to file with FINRA

The SEC and the CTFC have together proposed a rule that would require private fund advisers to file Form PF periodically. On October 6, 2011, the SEC announced that if Form PF is adopted, private advisers will file the form with FINRA’s IARD. Continue reading

The SEC and the CFTC have together proposed a rule that would require private fund advisers to file Form PF periodically. On October 6, 2011, the SEC announced that if Form PF is adopted, private advisers will file the form with FINRA’s IARD. The filing fees for Form PF would be $150 for quarterly filings and $150 for annual filings.

Source: Federal Register Volume 76, Number 194

This alert applies to the Series 65, Series 66, Series 24, Series 62, and Series 82.

FINRA Alert: New rules for social media and personal device use for business purposes

Since FINRA first released rules regarding these issues back in 2010, many in the finance industry have raised questions and concerns over their abilities Continue reading

Since FINRA first released rules regarding these issues back in 2010, many in the finance industry have raised questions and concerns over their abilities to comply with these rules while keeping up with explosion of social media. Last week, FINRA responded to these concerns by releasing several guidelines clarifying rules surrounding use of social media websites and personal devices for business purposes. For example, some of the guidelines included the following:

If an individual posts a statement on Twitter on behalf of the firm, that will likely constitute an interactive statement and not require prior approval by a firm’s registered principal. However, if that statement is then posted on a blog, becoming a static statement (and therefore an advertisement), prior approval is necessary.
Whether a statement is interactive or static, recordkeeping rules still apply. This means that individuals and/or firms may not use social media sites or devices that automatically delete any posts.
Individuals may respond to third-party business-related posts on their personal social media site without violating FINRA guidelines. However, responses must conform to firms’ individual policies regarding these types of posts.
As long as firms are able to keep records and supervise activity, individuals may use their own personal devices (e.g. a smart phone or a tablet) to conduct business and access business applications. Something to keep in mind when using a personal device to conduct business: firms are allowed to supervise all communications made on personal devices, including personal communications, if the device is ever used for business purposes.

These are just a sampling of issues the recent FINRA Regulatory Notice addressed. Please click here to review the full notice.