As we look back on the SEC’s actions in 2024, we wanted to share our thoughts on lessons learned that we believe will carry through to 2025.
In addition to basic blocking and tackling, compliance officers often have the thankless job of performing the annual review of their compliance program required by Advisers Act Rule 206(4)-7. As discussed in our blog post, Write the Best Annual Compliance Program Review Ever!, that review should consider changes to the Advisers Act and applicable regulations, legal proceedings and guidance from regulators, including risk alerts and interpretations. To simplify the task of collecting all of this information, I’ve identified the top regulatory hot buttons to help advisory firms update their compliance programs for 2025. This is not an exhaustive list; instead, it is the highlight reel of SEC focus areas.
Things have perked up this month, with EXAMS’ release of its 2025 priorities and publication of a new FAQ on Form PF’s compliance deadlines. The SEC also settled with two advisers on “greenwashing” charges, presumably resulting from EXAMS promise in its 2020 Exam Priorities to review “the accuracy and adequacy of disclosures provided by RIAs offering clients new types or emerging investment strategies, such as strategies focused on sustainable and responsible investing, which incorporate environmental, social, and governance (ESG) criteria.” I also could not resist including two cases from September. The first case includes a textbook example of the issues raised when cross-trading illiquid fixed-income securities. The second case provides a rare example of the SEC pursuing a firm for failing to register because of operational overlap.
Most compliance officers struggle to determine whether they are conducting enough testing to satisfy their obligations under the Advisers Act. In its release adopting Advisers
Many private fund managers are breathing a sigh of relief after the Fifth Circuit struck down the Private Fund Rules (check out our blog post
Check out our regulatory update for May 2024, including Amendments to Regulation S-P, Proposed CIP requirements, the latest SEC Risk Alert on Marketing Rule, and more!
The SEC’s Risk Alert provides a list of Marketing Rule deficiencies — a must read!
