Exam Alert: SEC proposes rule to change standards for “qualified clients”

The SEC has proposed a rule to increase the dollar amount thresholds for “qualified clients” (clients that may be Continue reading

The SEC has proposed a rule to increase the dollar amount thresholds for “qualified clients” (clients that may be charged performance-based fees by an investment adviser).  The current rule requires a qualified client to have $750,000 in assets under management or $1.5 million in net worth.  Under the proposed rule, these thresholds will be increased to $1 million in assets under management and $2 million in net worth.  This revision is required to occur by July 21, 2011. Relevant to sections 4.3.3 of the Series 24 exam, as well as the Series 63, Series 65 and Series 66 exams.

http://www.sec.gov/rules/proposed/2011/ia-3198.pdf

Exam Alert: SEC proposes amendment requiring broker-dealers to search for missing securityholders

On March 18, 2011, the SEC proposed an amendment to Rule 17Ad-17, which currently requires transfer agents to look for Continue reading

On March 18, 2011, the SEC proposed an amendment to Rule 17Ad-17, which currently requires transfer agents to look for missing holders of securities.  The amendment would extend this obligation to broker-dealers.  Two database searches are required: the first one must occur three to twelve months after the securityholder becomes lost, and the second one must take place six to twelve months after the first search.

http://www.sec.gov/rules/proposed/2011/34-64099.pdf

Exam Alert: SEC proposes rule to eliminate credit rating as a condition for short-form securities registration

On February 9, 2011, the SEC voted unanimously to propose an amendment to its rules that would remove credit ratings as a condition Continue reading

On February 9, 2011, the SEC voted unanimously to propose an amendment to its rules that would remove credit ratings as a condition for registration of securities using short-form registration or shelf registration.  Instead of a credit rating qualification, the issuer must have issued $1 billion of non-convertible securities in the past three years.  This proposed change is part of the Dodd-Frank Act reforms, which among other things require that federal agencies remove references to credit ratings from their rules. Relevant to the Series 79, the Series 24 and the Series 62.

http://www.sec.gov/news/press/2011/2011-41.htm

Exam Alert: SEC to nationalize exam program

According to the Wall Street Journal, the SEC is putting the finishing touches on a new uniform manual for its examiners. The WSJ states that the SEC expects Continue reading

According to the Wall Street Journal, the SEC is putting the finishing touches on a new uniform manual for its examiners.  The WSJ states that the SEC expects that the new manual will nationalize the agency’s examination program, allowing for uniform processes and procedures across all regional offices.  The SEC intends to distribute the manual to examiners in 30 to 60 days and to the public in 30 to 90 days (as of 2/8/11), according to the WSJ.

http://online.wsj.com/article/SB10001424052748704364004576132231587877342.html

Exam Alert: New SEC rules on shareholder approval of executive compensation

Effective January 25, 2011, the SEC has adopted new rules concerning shareholder approval of executive compensation. The new rules require Continue reading

Effective January 25, 2011, the SEC has adopted new rules concerning shareholder approval of executive compensation. The new rules require “say-on-pay” votes to take place at least once every three years.  The frequency with which these say-on-pay votes occur must be voted on at least once every six years, and the results of the frequency vote are reported on Form 8-K. Relevant to Series 6, Series 7, Series 62, Series 66, Series 24 and Series 79 exams.

http://www.sec.gov/news/press/2011/2011-25.htm

Exam Alert: Private advisers must register with the SEC

Effective July 21, 2011, investment advisers to most private funds (hedge funds and private equity funds) must register with the SEC. Previously, these Continue reading

Effective July 21, 2011, investment advisers to most private funds (hedge funds and private equity funds) must register with the SEC.  Previously, these advisers had been exempt due to the “private adviser”” exemption.  The Dodd-Frank Act replaces this exemption with narrower exemptions for certain advisers, including advisers that exclusively advise venture capital funds and private fund advisers with less than $150 million in assets under management in the United States.

http://www.sec.gov/spotlight/dodd-frank/hedgefundadvisers.shtml