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. The below is not intended to be an exhaustive list, but is rather designed to assist you in setting compliance priorities for 2017.

SEC's Disgorgement Power Limited by the US Supreme Court

In what will be a major restriction to an agency  that collects billions of dollars in disgorgement every year. The Court unanimously found that SEC disgorgement is a civil penalty and is subject to a five-year statute of limitations, overturning a Tenth Circuit decision upholding USD 35 million in disgorgement and USD 18 million in prejudgment interest against New Mexico investment adviser Charles R. Kokesh.
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Investment Adviser and CEO Face Judgment for Failure to Disclose Increasing Fees to Clients

The SEC obtained final judgments by consent against an investment adviser and its Chief Executive Officer for failing to disclosure that moving its clients' assets into the adviser's created and managed mutual funds would increase the clients' total advisory fees while not changing the investment strategy.
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SEC Considering its Own Broker Fiduciary Standard

On 9 June 2017, the US Secretary of Labor stated that they found no principled legal basis to change the June 9th implementation date for the expanded definition of a fiduciary. In response new SEC Chair Jay Clayton has entered the debate by remarking that the rule may have significant effects on retail investors and entities regulated by the SEC as well as broader effects on capital markets.  Chair Clayton went further to solicit public comment on how the SEC should approach a standard of its own for investment advisers and brokers.
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Update on the Financial CHOICE Act of 2017 (CHOICE Act)

The CHOICE Act was passed in the US House of representatives with nearly all Republicans voting in support and nearly all Democrats voting against passage. The CHOICE Act now moves to the US Senate where it may face a much harder time garnering enough support to succeed.
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Individual Trader from Large Financial Institution Settles CFTC Civil Action and Pleads Guilty to Criminal Spoofing Claim

On 2 June 2017, an individual trader settled claims of spoofing and attempted manipulation with the CFTC arising from trading in the gold and silver futures markets. The alleged misconduct occurred over a 2-year span while the individual trader was working at the trading desk of a large financial institution. The trader also plead guilty to one criminal count of conspiracy to commit wire fraud and one criminal count of spoofing.
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CFTC Grants Foreign Board of Trade Status to Eurex Zurich AG

On 30 May 2017, the CFTC issued an order of registration to Eurex Zurich AG authorizing it as a foreign board of trade and therefore, allowing the exchange to provide US participants with direct access to its electronic order entry and trade matching system.
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29 June 2017

Fund-of-Funds distribute audited financial statements to investors.

30 June 2017

Amended Form 13H: Filing due promptly after this date. Following an initial filing of Form 13 H, all large traders must make amended filings following the quarter end.

10 July 2017

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

Large liquidity fund advisers must file Form PF with the SEC on the IARD system within 15 days of each fiscal quarter end. 

31 July 2017

Investment Advisers Quarterly Transaction Reports (for second quarter 2017) are due.

14 August 2017

Form 13F (and any related confidential treatment request) due for second quarter 2017.

29 August 2017

Quarterly update to Form PF due for all "large hedge fund advisers" for second quarter 2017.

Large Commodity Pool Operator Form CPO-PQR (Second quarter) required to be filed with the NFA for commodity pool operators. Small and mid sized CPOs are also required to file.

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