Cybersecurity has been a key priority for the SEC and its Office of Compliance Inspections and Examinations (OCIE) in recent years. The OCIE regularly releases publications addressing cybersecurity risks and practices, including eight risk alerts related to cybersecurity since 2012.

In the latest example, OCIE recently published its Cybersecurity and Resiliency Observations Report, describing 34 best practices culled from its assessment of thousands of past examinations of SEC registrants.

In this client alert, we highlight the top ten controls recommended in the report that have been relevant in cybersecurity matters that we have handled for our clients.

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The California Consumer Privacy Act (CCPA) imposes sweeping obligations on a diverse array of businesses, but investment advisers subject to Regulation S-P (adopted pursuant to the federal Gramm-Leach-Bliley Act (GLBA)) are treated somewhat differently. The CCPA does not provide a blanket exemption for investment advisers with retail clients, although the CCPA’s exception for personal information covered by the GLBA takes the edge off the CCPA. In addition, two late amendments to the CCPA also reduce the scope of the CCPA for investment advisers during the year 2020.

The CCPA applies to some personal information that investment advisers routinely handle. Therefore, it’s important that investment advisers examine the compliance burdens they may have under the CCPA. This checklist is intended to help investment advisers track their CCPA compliance obligations for 2020 and 2021.

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On December 17, 2019, three different divisions of the Commodity Futures Trading Commission (“CFTC”) issued no-action letters intended to facilitate the swaps market’s transition away from interbank offered rates (each, an “IBOR”) and toward alternative benchmarks. The letters responded to requests for relief made by the Alternative Reference Rates Committee (the “ARRC”), the group convened by the Federal Reserve to facilitate the transition away from USD LIBOR, the IBOR generally used for United States dollars, to the new reference rate chosen by the ARRC, known as the secured overnight financing rate, or SOFR.

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Before closing the books on 2019, registered investment advisers and funds should take a look back at the activity undertaken by the SEC and its staff in the past year and carefully consider steps to be taken to implement new and amended regulations adopted by the SEC throughout the year.

The start of a new year is also a good time to evaluate what remains on the SEC’s regulatory agenda.

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The Securities and Exchange Commission (SEC) proposed amendments to both the advertising rule and the cash solicitation rule under the Investment Advisers Act of 1940 (the “Advisers Act”) on November 4, 2019. Neither rule — adopted in 1961 and 1979, respectively — has been amended significantly since it was adopted, although the SEC and its staff have, from time to time, granted no-action relief and otherwise interpreted the application of these rules. According to the SEC, the proposed amendments are intended to update such rules to reflect changes over the past half-century in “technology, the expectations of investors seeking advisory services, and the evolution of industry practices.”

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On June 5, 2019, the SEC issued an Interpretive Release designed to “reaffirm, and in some cases clarify, the standard of conduct that investment advisers owe to their clients.” The Interpretive Release highlights existing principles relevant to an adviser’s fiduciary duty; it does not create any new regulation.

The Interpretive Release sets forth the SEC’s views on the application of Section 206 of the Investment Advisers Act of 1940 (the “Advisers Act”) to SEC-registered advisers, state-registered advisers and investment advisers that are exempt from registration (including exempt reporting advisers) or that are subject to a prohibition on registration under the Advisers Act. In short, any entity or individual that meets the definition of “investment adviser” set forth in the Advisers Act will be held to the standards outlined in the Interpretive Release.

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How do self-regulatory organizations, such as ones acting for the futures industry and broker-dealers, steer clear of being deemed a government actor for purposes of the Constitution’s Fifth Amendment privilege against self-incrimination, while at the same time coordinating with a governmental authority enough to avoid duplication or disruption?  When can respondents in such cases successfully assert their Fifth Amendment rights?

Click here to read an analysis on these questions.