Each week we are giving you our weekly report highlighting the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to registered investment adviser ("RIA") compliance and regulatory issues. This week's recap focuses on the Securities and Exchange Commission’s (“SEC”) ad rule effective date, Form CRS submissions, and a Paycheck Protection Plan (“PPP”) extension act.
Here's our top investment adviser compliance articles for the week of March 5th, 2021:
1. Clock starts ticking on November 2022 compliance for SEC ad rule (Author – Mark Schoeff Jr., InvestmentNews)
Following the official publication of the SEC ad rule on Friday, March 5, 2021, Mark Schoeff discusses the importance for firms to update their compliance programs and procedures in line with new marketing efforts related to testimonials, endorsements, and third-party ratings. Pamela Pendrell, chief compliance officer at GlobeFlex Capital lists the action items firms should take, such as assessing and adjusting their current marketing efforts and training staff on the new regulatory obligations.
2. Compliance slip? Hundreds of firms fail to file Form CRS with SEC (Author – Kenneth Corbin Financial Planning)
Peter Driscoll, Director of the SEC’s division of examinations, states that hundreds of firms that serve retail investors failed to file their Form CRS, also known as the relationship summary document. These firms are said to be facing further examinations by the SEC.
Additionally, in the SEC’s recently published list of 2021 priorities, Driscoll’s team cautioned advisers that the Form CRS would be scrutinized for how firms describe their practices. This article lists a few of the top priorities including cybersecurity plans and ESG investing.
3. Lawmakers Float PPP Loan Application Deadline Extension (Author – Melanie Waddell, ThinkAdvisor)
On Thursday, March 11th, the Paycheck Protection Program (PPP) Extension Act was introduced by Nydia M. Velázquez , the Chairwoman of the House Small Business Committee. This article brings attention to the demand for small business loans and relief programs due to the impacts of the now year-long pandemic. This bill will provide small businesses with two more months to apply for a PPP loan.
With May 4th set as the effective date for the SEC’s ad rule, industry experts speculate how firms will take advantage of the new marketing and advertising opportunities. Caroline Crenshaw, Commissioner with the SEC, mentions the need to monitor the implementation of new efforts as some issues may not be caught in the front end.
Emile Hallez discusses the Department of Labor’s (DOL) recent statement regarding a “hands-off approach” to the two following rules, Financial Factors in Selecting Plan Investments and Fiduciary Duties Regarding Proxy Voting and Shareholder Rights.
The DOL has revealed that it will release further guidance on the rules and will not pursue enforcement actions at this time. Ali Khawar, principal deputy assistant secretary at the DOL, detailed the departments intentions to conduct more stakeholder outreach to develop rules that “better recognize the important role that environmental, social and governance integration can play in the evaluation and management of plan investments, while continuing to uphold fundamental fiduciary obligations.”
Don't forget to check out last week's top RIA compliance news articles that focus on the SEC's 2021 examination priorities, the SEC’s ad rule, and the SEC’s new ESG task force.