Beginning on October 1, 2017, investment advisers will be expected to comply with the various new disclosures required on the Form ADV. Earlier this summer, the SEC released additional guidance for investment advisers and compliance professionals in the form of frequently asked questions (“FAQ”) to help answer any remaining questions advisers may have on how…

Over the past few months several ICSGroup clients have had their very first SEC examination. We’ve noticed some noteworthy trends in the types of issues that are of most concern to regulators. Being aware of these issues will enable you to be more prepared for the inevitable SEC exam and may help you avoid being…

While accounting standards, valuation frameworks and industry guidelines have been moving towards standardization of valuation principles, private equity (“PE”) fund managers still have substantial freedom when valuing their portfolio companies. For example, there is inevitable temptations to present interim performance numbers in a particularly favorable light when raising a follow-on fund or limiting write-downs during…

The focus on environmental, social and governance (ESG) as a means of creating sustainable value is on the rise. Institutional investors are increasingly considering nonfinancial performance, such as ESG issues, when making investment decisions. The three factors of ESG and the corresponding investment-related sustainability issues are: Environmental – Is the company environmentally responsible? Does the…

The U.S. Department of Labor announced yesterday, April 5, 2017 that it will delay the applicability date of the Fiduciary Rule and related exemptions by 60 days. Under the terms of the extension, advisers to retirement investors will be treated as fiduciaries and have an obligation to give advice that adheres to “impartial conduct standards”…

The DOL Fiduciary Rule (the “Rule”) that will require all advisors to act as fiduciaries with their ERISA clients is rule that was constructed over the course of more than six years by the Obama Administration. Since the Rule was proposed in April 2015, it has been vehemently opposed by many Republicans who believe it…

On February 7, 2017, the Securities and Exchange Commission (“SEC”) Office of Compliance Inspections and Examinations (“OCIE”) released a risk alert identifying the five compliance areas most commonly cited in deficiency letters sent to SEC-registered investment advisers (“RIA”). The risk alert focuses on deficiency letters from more than 1,000 RIA audits conducted over the past two years. This…

Assessing your firm’s ethics culture is the first step in developing and maintaining a strong ethics culture and, ultimately, to earning investors’ trust in your firm. In remarks from the 2016 FINRA Annual Conference, Chairman and CEO of FINRA, Richard Ketchum stated: “Having spent nearly four decades regulating the securities industry, and spending some time…

2016 was a year of increased regulations and record enforcement actions against Investment Advisors/Investment Companies and Broker Dealers. The SEC brought 868 enforcement actions and assessed more than $4 billion in disgorgement and penalties. FINRA assessed $145 million in fines and $41 million in restitution.  Promises of deregulation and a new administration in the White…

With the holiday season upon us, now is a good time to remind your employees of your Gifts and Entertainment (“G&E”) Policy and how to avoid conflicts of interest. Although the SEC has advised investment advisers to set “limitations on acceptance of gifts”, it has offered no formal guidance with respect to specific threshold dollar…

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