Arbitration Clauses

Arbitration Clauses

Recently FINRA released a Regulatory Notice reminding member firms that if they have a mandatory arbitration clause in their customer agreement, there are certain minimum disclosure requirements that are established by FINRA rules. FINRA Rule 2268 spells out what can and can’t be in arbitration clauses.

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Assessing Custody for Registered Investment Advisers

Assessing Custody for Registered Investment Advisers

One of the most critical rules under the Investment Advisers Act of 1940 (“Advisers Act”) is the custody rule, which is designed to protect advisory clients from the misuse or misappropriation of their funds and securities. With an adequate custody assessment, your firm should be able to recognize whether it has “custody” as defined under the custody rule and has appropriate controls to comply with the custody requirements. Your firm should also build appropriate controls and procedures to ensure future compliance with the custody rule, as applicable to the firm.

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Brokers with a Disclosure History

Brokers with a Disclosure History

On March 10, FINRA issued Regulatory Notice 21-09 announcing FINRA’s adoption of new rules to address brokers with a disclosure history and the broker-dealers that employ them.

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Material Changes to Form ADV

Material Changes to Form ADV

An investment adviser must promptly update its brochure if the information contained in it becomes materially inaccurate. This updated brochure is referred to as an “interim amendment”. Upon updating the brochure to reflect material changes, the investment adviser should begin delivering the interim amendment to its prospective clients before or at the time it advisory contract with such clients. For some material changes, the investment adviser will be further obligated to promptly deliver the interim amendment to its existing clients.

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Delivery of Form ADV

Delivery of Form ADV

Determining if delivery of Form ADV is required for each client or prospective client that contains all information required by Part 2 of Form ADV and what must be included in the Firm’s ADV is a complex topic. An RIA should consult an attorney or compliance consultant to ensure their brochure contains the necessary information.

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How to Qualify for Puerto Rico's Act 20

How to Qualify for Puerto Rico’s Act 20

Act 20, known as the “Export Services Act”, provides tax exemptions and tax credits to businesses engaged in eligible activities in Puerto Rico and has made the island a hot spot for exportation of international services worldwide. These tax laws were the response to Puerto Rico’s ballooning national debt that started accumulating when the US government cut federal subsidies to the island in 1996. Beginning in 2012, Puerto Rico used its special status within the United States to create unique tax incentives that would lure successful employers down to the island to bring capital and create jobs. The tax benefits Puerto Rico’s Act 20 offers are as follows:

  • Corporate tax rate reduced to 4%;
  • 100% tax exemption on all distributions from earnings and profits;
  • 90% tax exemption from personal property taxes for certain types of businesses;
  • 90% tax exemption from real property taxes for certain types of businesses; and
  • 60% tax exemption on municipal taxes.

For more details on the benefits of Act 20, check out our Act 20: Puerto Rico Tax Incentives blog now.

To be able to take advantage of Act 20, there are 3 major steps you need to take for your company to qualify for these tax benefits.

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