Check out our Flash Reports for the latest SEC- and compliance-related news, trends, and insights.
On August 23, 2023, a divided SEC voted to adopt enhanced regulations of private fund advisers. These included two rules that all investment advisers managing private funds must follow: the Preferential Treatment Rule and the Restricted Activities Rule.
Read MoreThe SEC announced on Monday that it settled charges against two investment advisers, Delphia (USA) Inc. and Global Predictions Inc., for making false and misleading statements about their purported use of artificial intelligence (AI), according to a SEC press release. This is the first time the SEC has fined investment advisers for false and misleading statements about their use of AI.
This year, Securities and Exchange Commission (SEC) Exams will remain focused on the new Marketing Rule, as well as AI, according to Natasha Vij Greiner, deputy director of the SEC’s Division of Examinations, who recently spoke at the Investment Advisers Association (IAA) Compliance Conference in Washington, D.C.
Last week, the National Institute of Standards and Technology (NIST) released version 2.0 of its widely used Cybersecurity Framework (CSF), its landmark guidance document for reducing cybersecurity risk. This is the first major update since the framework was initially launched in 2014 to help organizations understand, mitigate, and communicate cybersecurity-related risks.
On February 13, 2024, the Financial Crimes Enforcement Network (FinCEN) proposed a new rule to combat the investment of illicit funds in the U.S. financial system. The proposed rule would require certain investment advisers to apply Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements pursuant to the Bank Secrecy Act (BSA).
An active phishing campaign using individualized phishing lures is targeting senior corporate accounts in Microsoft Azure environments, according to researchers from Proofpoint, a company that provides cybersecurity products and software.
On February 6, 2024, the SEC updated its Frequently Asked Questions page for the new Marketing Rule. The page now has four questions and four answers, which provide clarity on items such as the compliance date of November 4, 2022, and an adviser’s ability to comply early; the prescribed time period requirement and conditions on the use of interim performance information; presenting performance of one investment or group of investments in a private fund; and calculation of gross and net performance.
On February 8, 2024, the SEC adopted additional amendments to Form PF that build on those adopted in May and July of 2023. The amendments will require SEC-registered advisers to private funds, particularly advisers to hedge funds, to report additional information on Form PF. The amendments’ effective and compliance dates will be one year after their publication in the federal register.