• March 13, 2023

    SEC Proposes Changes to Advisers Act Custody Rule

    The Commission recently proposed changes to the Custody Rule (Rule 206(4)-2) of the Investment Advisers Act of 1940, proposing instead a new rule, referred to as “the Safeguarding Rule” (Rule 223-1). The current custody rule only applies to client funds and securities, however, the new rule applies to client assets which includes “funds, securities, or other positions held in the client’s account” as noted in the proposal.

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  • March 9, 2023

    Event of Interest: Dechert to Host Compliance and Regulatory Priorities Webinar

    The webinar will focus on updates for compliance and legal professionals, but plans to cover recent and upcoming changes to the applicable regulations for SEC-registered and unregistered advisers, as well as some practical tips for compliance which may be relevant to fund directors broadly.

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  • March 8, 2023

    Morgan Lewis Releases Report on SEC Exams and Enforcement Developments

    Of relevance to fund directors, the report highlights a summary of ESG-related enforcement actions including two cases involving investment advisers that managed mutual funds. Areas of focus continue to be with products including complex products such as “derivatives and leveraged exchange-traded funds, exchange-traded notes and other exchange-traded products,” advisers’ operations and compliance programs, and fees.

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  • March 7, 2023

    Senate Banking Committee Hears Testimony on Cryptocurrency Issues

    the Senate Banking Committee held a hearing entitled, “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets.” Democrats on the panel, who hold the majority on the Senate side, agreed with Chairman Sherrod Brown on the importance of transparency, consumer protection, and risk management. Many on the Republican side of the dais noted the importance of balancing consumer protection with the emerging uses of digital asset technology.

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  • March 6, 2023

    Event of Interest: Seward and Kissel to Host Webinar on Off-Channel Communications and Recordkeeping Responsibilities

    Seward & Kissel partners from the firm’s Government Enforcement and Internal Investigations Group will discuss the SEC’s recent enforcement actions regarding recordkeeping failures related to employee use of personal devices and what clients should consider doing in order to mitigate any issues.

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  • March 2, 2023

    Harvard Law Blog Post on Third Party Oversight

    The post, authored by professionals from Deloitte & Touche, discusses measures boards may take to oversee third-party risk with greater confidence. The article encourages boards to ask, “probing questions of management regarding its understanding of risk in third-party relationships that exist in the lower tiers of the extended enterprise.”

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  • March 1, 2023

    K&L Gates Publishes “ESG and the Sustainable Economy Handbook”

    K&L Gates published a series entitled the “ESG and the Sustainable Economy Handbook” which examines “how investors evaluate companies based on ESG and sustainability criteria, the way companies incorporate these standards into their operating principles, and the legal and financial considerations for both groups.”

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  • February 28, 2023

    MFDF Webinar: Fund Industry Claims Trends- An Insurer’s Perspective

    The Mutual Fund Directors Forum and ICI Mutual will host a webinar entitled, “Fund Industry Claims Trends: An Insurer’s Perspective" which will provide an overview of trends and other developments in fund industry claims and in the fund industry insurance market.

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  • February 27, 2023

    SEC Finalizes Rule on T+1 Settlement Cycle

    the Securities and Exchange Commission finalized its rule proposal shortening the settlement cycle of most securities transactions to within one business day of the trade date, what is referred to as “T+1.” The T+1 transition and implementation deadline is currently set for May 28, 2024.

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  • February 23, 2023

    SEC Division of Examinations Releases 2023 Priorities

    The SEC's Division of Examinations staff identified ESG-related investments and strategies that incorporate ESG criteria as a top focus area including a continued focus on potential “greenwashing” at investment firms. Additionally, the staff will continue to focus on the calculation and allocation of fees and expenses, valuation practices, and cybersecurity, as well as other enumerated issues.

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  • February 22, 2023

    Fund Boards Submit Comments on SEC Swing Pricing, Liquidity Management Proposal

    Over 25 fund boards submitted comment letters opposing the swing pricing mandate, imposition of the hard close, and changes to fund liquidity management. The comments overwhelming objected to the SEC’s proposal citing costs, impact on shareholders, and complications in implementation as reasons for the opposition.

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  • February 21, 2023

    Event of Interest: Nasdaq Center for Board Excellence to Host Webinar on Succession Planning

    On Thursday, the Nasdaq Center for Board Excellence will host a panel of experts to discuss board succession planning. While this program is geared toward corporate boards, there are likely to be takeaway lessons for fund boards as well that are looking to develop their succession planning process.

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  • February 16, 2023

    Mutual Fund Directors Forum Submits Comments on SEC Swing Pricing, Liquidity Rule Proposal

    This week, the Mutual Fund Directors Forum submitted written comments to the SEC’s proposal that would mandate swing pricing and make significant changes to fund liquidity management programs. The Forum’s comments push back against the Commission’s proposal to mandate swing pricing for mutual funds as the rule would change how investors buy and sell mutual funds. The letter also highlights issues with the hard close, noting in the mutual fund space the “intermediary structure facilitates investors’ ability to make purchases or redemptions up until the market close” and tinkering with these expectations without a proven benefit, will confuse and harm mutual fund investors.

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  • February 15, 2023

    MFDF Webinar: An Overview of Current Tax Landscape for the Fund Industry

    The Forum, in conjunction with Ernst & Young, plans to host a webinar entitled, “Tax Update: An Overview of Current Tax Landscape for the Fund Industry.” The webinar will provide post-election perspectives on the tax regulation landscape, as well as discuss recent tax developments and hot topics in the mutual fund industry.

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  • February 14, 2023

    SEC Issues Regulatory Bulletin on Fund Fee Waivers

    The SEC recently issued a regulatory bulletin entitled, “Differential Advisory Fee Waivers" which is meant to “remind mutual funds, their boards of directors/trustees and their legal counsel about the implications under the Investment Company Act of 1940 of fee waiver and expense reimbursement arrangements that result in different advisory fees being charged to different share classes of the same fund.”

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  • February 13, 2023

    Federal Reserve Releases Report on Liquidity Tools for Open-End Funds

    Federal Reserve Board staff offer their views in an article titled, “New Insights from N-CEN: Liquidity Management at Open-End Funds and Primary Market Concentration of ETFs” which sources data on mutual funds, ETFs, and money market funds through Form N-CEN, to determine which liquidity tools these fund types take advantage of.

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  • February 9, 2023

    SEC Commissioner Uyeda Delivers Remarks on ESG

    EC Commissioner Mark Uyeda delivered remarks entitled “ESG: Everything Everywhere All at Once” highlighting the growth and areas of concern within ESG investing. Commissioner Uyeda’s noted that “regulators, industry participants, and investors have struggled to define ‘ESG,’” but he posits that existing regulatory structures already exist for ensuring investment advisers fully describe and follow the strategies they utilize.

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  • February 8, 2023

    Davis Polk Releases 2023 Regulatory Reform Forecast

    Davis Polk recently released the “Financial Services Regulatory Reform: Winter Forecast Edition” which includes a look at the financial regulatory landscape across a number of topics and agencies including the Federal Reserve, the SEC, and Treasury, among others. Regarding securities market structure, the report summarizes the recent SEC proposals covering market structure, trading in US Treasurys, and potential changes to the settlement cycle.

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  • February 7, 2023

    Prudential Regulators Issue Joint Statement on Crypto-Asset Risks to Banking Entities

    The statement highlights key risks associated with digital assets implemented using cryptographic techniques, as well as the crypto-asset sector more broadly, that the prudential regulators believe banking organizations should consider. The regulators’ warn that “the agencies believe that issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices.”

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  • February 6, 2023

    Event of Interest: Ropes & Gray to Host Webinar on “Creating a Culture of Compliance”

    Ropes & Gray plans to host a webinar entitled, “Creating a Culture of Compliance” which will discuss ways compliance professionals can make their programs more effective and efficient. As entities continue to build out their compliance programs, “ticking the box” with policies, procedures and training sessions is not enough to meet regulatory scrutiny.

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