On March 23, 2020, the SEC’s Office of Compliance Inspections and Examinations (OCIE) announced that it will conduct its examinations of SEC registrants through correspondence, unless it is absolutely necessary to be on-site. On the same day, the co-directors of the Division of Enforcement issued a statement underscoring the importance of maintaining and following corporate controls and policies. Notwithstanding current remote work environments, the staff of both OCIE and the Division of Enforcement remain committed to their mission of protecting investors.

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Like all of us, the SEC and its staff are moving rapidly to address changes to normal procedures required in the face of COVID-19. In response to questions recently raised by the Investment Advisers Association (IAA) on behalf of its members, the SEC staff clarified its expectations with respect to certain aspects of the Custody Rule (Rule 206(4)-2 under the Investment Advisers Act of 1940) and Form ADV disclosure.

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On March 13th, the SEC announced that it is extending certain filing deadlines for investment advisers and registered funds that have been affected by COVID-19. Boards of registered funds that may find it challenging to travel to meetings also received temporary relief from in-person meeting requirements under the Investment Company Act. We analyze the recent orders and discuss key considerations for registrants.

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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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