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 Chairman Jay Clayton Released a Statement on Cybersecurity
In the statement Chairman Clayton recognized that the most diligent cybersecurity efforts will not address all risks, but that a successful program must include assessment, prevention, mitigation, resilience and recovery. You can read the full text of Chairman Clayton's statement here.

Risk Alert Highlights Improper Use of Gross Returns Among Other Advertising Infractions
In its September Risk Alert, the SEC's National Examination Program addresses the most frequent advertising rule compliance issues seen in examinations. Highlights are (i) misleading performance results (ii) misleading one-on-one presentations (iii) misleading claim of compliance with voluntary performance standards (iv) cherry-picked profitable stock selections (v) misleading selection of recommendations and (vi) compliance policies and procedures. The alert also highlights specific results from the SEC's touting initiative. The full text of the alert can be found here.

SEC Issues Report Highlighting Digital Assets May be Treated as Securities
SEC's enforcement division found that DAO (Decentralized Autonomous Organization) tokens are securities under the Securities Act of 1933 and the Securities Exchange Act of 1934, and warns those issuing blockchains that they should take appropriate steps to ensure compliance with U.S. federal securities laws. The full report can be reviewed here.

The CFTC's Enforcement Director Discusses Self-Reporting and Cooperation
CFTC Division of Enforcement Director James McDonald announced a series of self-reporting and cooperation advisories. In the advisories, the Division sets forth the factors it will consider if a person chooses to self-report a violation and/or cooperate with the Division. The Advisories can be reviewed here.

CFTC Chairman Giancarlo Discusses Regulatory Initiatives
In two recent speeches, the CFTC Chairman discussed his views on likely regulatory reform efforts relating to swaps over the course of the year, as well as regulatory comparability among commodity interest products. The full speeches can be reviewed here.

OCC Releases Bank Supervision Plan for FY 2018
The OCC released its bank supervision operating plan for fiscal year 2018, which includes the following areas: (i) cybersecurity and operational resiliency; (ii) commercial and retail credit loan underwriting, concentration risk management, and the allowance for loan and lease losses; (iii) business model sustainability and viability and strategy changes; (iv) Bank Secrecy Act/anti-money laundering (BSA/AML) compliance management; and (v) change management to address new regulatory requirements. The plan can be found here.

Banking Agencies Propose Simplifying Regulatory Capital Rules
The federal banking agencies proposed a rule intended to reduce regulatory burden by simplifying several requirements in the agencies' regulatory capital rule. The proposed rule would primarily apply only to banking organizations that are not subject to the "advanced approaches" in the capital rule, which are generally firms with less than $250 billion in total consolidated assets and less than $10 billion in total foreign exposure. The proposed rule simplifies the capital treatment for certain acquisition, development, and construction loans, mortgage servicing assets, certain deferred tax assets, investments in the capital instruments of unconsolidated financial institutions, and minority interest. The proposed rule can be read here.

Senate Confirms Quarles as Fed's Top Bank Regulator
On October 5, 2017, the Senate voted to confirm Randal Quarles as the first-ever vice chairman for supervision of the Federal Reserve Board of Governors. The position of vice chairman for supervision was created by the Dodd-Frank Act to oversee the largest U.S. banks, but has never before been filled. Read here.

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.

3 October 2017
FINRA short interest reporting due.

15 October 2017
Form PF for large Liquidity Fund Advisers due on the IARD system within 15 days of each fiscal year end.

25 October 2017
FINRA quarterly focus reports and form custody filings due.

30 October 2017
Quarterly transactions due (for third quarter 2017).

14 November 2017

  • Form 13F is due for third quarter 2017. Exchange Act Rule 13f-1 requires every institutional investment adviser that exercises investment discretion over accounts holding Section 13(f) securities with an aggregate fair market value on the last trading day of any month of any calendar year of at least $100 million to file Form 13F.
  • Form 13 H is due for third quarter 2017. Exchange Act Rule 13h-1(a)(1) Registered Advisers meeting the "large trader" thresholds are required to file an initial Form 13 H with the SEC within 10 days of triggering the threshold, annually within 45 days of fiscal year end and update quarterly to the extent that information changes.

29 November 2017
Quarterly update to Form PF due for all large hedge funds advisers (for third quarter 2017).

14 December 2017
FINRA Deadline for receipt of preliminary statement payments. Advisory firms with sufficient amounts in their flex-funding account will have funds automatically transferred to their renewal account to cover total renewal fees owned.

28 December 2017
Web CRD is unavailable due to final statement and renewal processing. Web CRD should be available again on December 29, 2017.

31 December 2017
Amended Form 13H due promptly after this date.

Explore More Insight
View All