This periodic newsletter brings you recent activity by the US Securities and Exchange Commission and Commodity Futures Trading Commission as well as compliance calendar reminders. It is not intended to be an exhaustive list, but is rather designed to assist you in setting compliance priorities for 2017.

SEC Moves to T+2 Settlement Cycle for Securities Transactions.

The SEC has adopted a rule amendment to shorten the settlement cycle for securities transactions from three business days to two, known as T+2. The SEC stated that the "amended rule is designed to enhance efficiency, reduce risk, and ensure a coordinated and expeditious transition…" Brokers are required to comply with the T+2 timing beginning September 5, 2017.
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SEC Issues No Action Letter Guidance on the Custody Rule.

The SEC has issued a No Action Letter addressing the questions of (i) whether an adviser has custody of client funds if it merely authorizes transfers to third parties pursuant to the standing letter of instruction or asset transfer (SOLA Relationships) and (ii) if investment advisers with SOLA relationships need to get a surprise inspection of those accounts, pursuant to the Advisers Act's custody rule. The SEC concludes that advisers with SOLA Relationships do have custody but that the staff would not recommend enforcement action if these advisers did not obtain a surprise inspection of the accounts so long as certain criteria are met. A Flash Briefing on this subject can be found here.
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SEC Provides Information for Affiliates of RIAs using the Unibanco No Action Letters.

The SEC Staff has issued guidance on how multi-national firms should document their reliance on the Unibanco line of no action letters (so-called "participating affiliates"), including what information should be submitted to the SEC.
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Dairy Company Fined $150,000 by CFTC For Failure to Register as an FCM.

The CFTC recently fined a dairy company $150,000 for failing to register as a futures commission merchant (FCM). The dairy company had been accepting orders for the purchase and sale of milk futures contracts from milk suppliers and crediting or debiting the milk suppliers’ accounts based on the performance of the futures contracts.
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10 April 2017 Form 13H
Form 13H (large trader) quarterly filing is due for Q1 2017 for advisers that have changes to any of the information reported.

15 April 2017 Form PF for Large Liquidity Fund Advisers
Large liquidity Fund advisers must file Form PF with the SEC on the IARD system within 15 days of each fiscal quarter end.

30 April 2017 Form ADV Part 2A Delivery
(120 days after SEC-Registered Adviser's Fiscal Year End) Registered investment advisers that have made material changes to Form ADV Part 2A are required to deliver to each client either an updated Form ADV Part 2A that includes a summary of material changes (or is accompanied by such a summary) or a summary of material changes with an offer to provide a copy of the updated 2A and information on how to obtain the Form ADV Part 2A.

Distribute Audited Financial Statements for Private Funds
Private fund investment advisers should have their funds audited by an independent, PCAOB-registered accountant and provide audited financial statements of their funds, prepared in accordance with U.S. generally accepted accounting principles, to the funds' investors within 120 days of the end of the funds' fiscal year (for funds with 31 December 2016 year-end, the date is 30 April 2017). Private funds that are fund of funds may deliver their statements within 180 days of their fiscal year end. (29 June  2017 for funds with 31 December 2016 year-end.)

1 May 2017 Form PF
An initial Form PF filing must be made within 120 days of fiscal year-end for private fund advisers that are not Large Hedge Fund Advisers or Large Liquidity Fund Advisers and manage more than USD 150 million in regulatory assets under management attributable to private funds as of 31 December 2016.

Form PF Annual Amendment
If you previously filed a Form PF, your Annual Amendment is due within 120 days of fiscal year-end for private fund advisers that are not Large Hedge Fund Advisers or Large Liquidity Fund Advisers and manage more than USD 150 million in regulatory assets under management.

15 May 2017 Form 13F
Form 13F quarterly filing is due for Q1 2017 within 45 days after the end of the calendar quarter.

30 May 2017 Form PF for Large Hedge Fund Advisers
Form PF must be filed by Large hedge fund advisers within 60 days of each quarter end on the IARD system.

CFTC CPO-PQR Form
Large Commodity Pool Operator Form CPO-PQR (March 31 quarter-end report) required to be filed with the NFA for Commodity Pool Operators.

NFA Form CPO-PQR
Small and Mid-Sized Commodity Pool Operators are required to file NFA Form CPO-PQR.

9 June 2017 DOL Fiduciary Rule Initial Compliance Date
If this rule is not delayed further or otherwise amended, it will expand the "investment advice Fiduciary" definition under the Employee Retirement Income Security Act of 1974 to include brokers who have retirement plan clients (including IRAs) as fiduciaries.

10 July 2017 Form 13H
Form 13H (large trader) quarterly filing is due for Q2 2017 for advisers that already have a Form 13H filing obligation and have changes to any of the information reported.

15 July 2017 Form PF for Large Liquidity Fund Advisers
Large liquidity fund advisers must file Form PF with the SEC on the IARD system within 15 days of each fiscal quarter end.

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