This periodic newsletter brings you recent activity by the U.S. 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.

Form ADV Revisions

The SEC staff has recently updated the frequently asked question guidance to Form ADV.

The information update can be found here

Senate Committee Discusses Updating CFIUS

The Committee on Foreign Investment in the United States is an inter-agency committee authorized to review transactions that could result in the control of a US business by a foreign person in order to determine the effect of the transaction on the security of the US. Over the last few years, CIFUS has been in the process of reforming. On 13 June 2017, US Secretary of Defense James Mattis, described CFIUS as "outdated," saying it "needs to be updated to deal with today's situation." When asked for suggested changes to CFIUS, Secretary Mattis offered as one example "the lack of restrictions on investment in certain types of technologies that we must have put in place." He declined to specify in the open session which technologies he would seek to protect.

Click here to review Secretary Mattis' testimony

Bills in U.S. Congress Would Effectively Repeal DOL Fiduciary Rule

Rep. Phil Roe (R-TN) introduced the Affordable Retirement Advice for Savers Act (H.R. 2823) in the House and Sen. Johnny Isakson (R-GA) introduced the Affordable Retirement Advice Protection Act (S. 1321) in the Senate on 8 June 2017. Both bills, taking different approaches, seek effectively to repeal the DOL’s new fiduciary rule under ERISA, which became generally applicable on June 9, 2017, and to add a new statutory definition of “investment advice.”

A copy of the House bill can be found here
A copy of the Senate bill can be found here

CFTC Fines Hong Kong-based Commodities Dealer USD 225,000 for Reporting Violations

The CFTC fined the Hong Kong-based cotton dealer for failure to regularly file its CFTC Form 304, a form used to report cotton call sales and purchases that is required for cotton dealers holding at least 100 cotton futures position at any given time. Even though the Hong Kong-based dealer was not registered in any capacity, the CFTC was able to exercise jurisdiction over the dealer because it had placed trades on U.S. futures exchanges.

A copy of the CFTC consent order can be found here 

CPOs and CTAs Are Now Required to Provide “Financial Health” Information to NFA

Effective 30 June 2017, CPOs and CTAs must file financial information on their quarterly Form PQRs and Form PRs regarding themselves and not just for funds they may have managed. The financial information is in the form of two ratios; a current asset/current liabilities (CA/CL) ratio and a total revenue/total expenses (TR/TE) ratio and must be provided by the CPO or CTA on its Form PQR or Form PR. The first filings covering the second quarter are due by 29 August 2017.

Additional information from the NFA can be found here

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.
  • CFTC CPO-PQR Form: Large Commodity Pool Operator Form COP-PQR (Second quarter) required to be filed with the NFA for commodity pool operators. Small and mid sized CPOs are also required to file. CPOs are now required to provide financial information on the Form PQR regarding the CPO, itself.

4 September 2017

US.National Holiday, Labor Day - EDGAR and SEC Closed.

30 September 2017

Form 13H Filing due promptly after this date.

1 October 2017

Compliance date for new Form ADV amendments. Firms with a December 31 fiscal year end that do not otherwise need to file a Form ADV amendment on or after October 1, may comply with their annual update prior to March 2018.

15 October 2017

Form PF for large Liquidity Fund Advisers due on the IARD system within 15 days of each fiscal year end.

30 October 2017

Quarterly transactions due (for third quarter 2017).

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