Tag: adviser

Exam Alert: SEC requires new exchange listing standards and proxy disclosures

Effective July 27, 2012, the SEC has adopted a new rule that requires national securities exchanges to modify their listing standards. The rule provides new standards for compensation committees and compensation advisers. The SEC also requires companies to disclosure of conflicts of interest for their compensation consultants. Continue reading

Effective July 27, 2012, the SEC has adopted a new rule that requires national securities exchanges to modify their listing standards.  The rule provides new standards for compensation committees and compensation advisers.  The SEC also requires companies to disclosure of conflicts of interest for their compensation consultants.

 

The new listing standards must include provisions that require each member of a company’s compensation committee to be a member of the board of directors and to be independent.  Independence will be gauged based on the source of the person’s compensation and whether the person is affiliated with the company, among other factors.

 

The standards must provide that the compensation committee:

-may retain a compensation adviser,

-be responsible for the selection, payment, and supervision of the compensation adviser, and

-is properly funded.

 

The standards must only allow a compensation committee to select a compensation adviser after considering:

-other services provided by the adviser to the company

-amount the adviser has earned from the company

-policies to prevent conflicts of interest

-relationships between the adviser and members of the compensation committee

-whether the adviser owns company stock

-relationships between the adviser and company executives

 

The following companies will be exempt from the compensation committee independence requirements:

-limited partnerships

-companies in bankruptcy proceedings

-registered open-end management investment companies

-foreign private issuers, though they must explain why they don’t have an independent compensation committee in their annual reports

The exchanges can establish additional exemptions.

 

The following companies are exempt from the compensation committee listing standards altogether:

-controlled companies

-smaller reporting companies

 

Under new proxy disclosure rules, companies must disclose whenever the work of a compensation consultant raises a conflict of interest, if that consultant has a role in setting the level of executive and director compensation.

 

Source: SEC Release 2012-115

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

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. Continue reading

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: Mid-sized advisers must register with the states

The SEC has modified the standards for federal investment adviser registration. They have raised the bar for federal registration from Continue reading

The SEC has modified the standards for federal investment adviser registration.  They have raised the bar for federal registration from $25 million in assets under management to $100 million.  Advisers with between $25 million and $100 million in assets under management fall into the new category of “mid-sized advisers,” which must register with the states unless they qualify for federal registration based on other criteria.  Mid-sized advisers have until June 28, 2012 to register at the state level.

Source: SEC Release 2011-133