SEC Archives - Page 2 of 16 - MasterCompliance

Reporting And Inquiry for Lost, Counterfeit, Missing, and Stolen Securities

Posted on February 18, 2022February 18, 2022 by admin

SEC Rule 17f-1 calls for the SEC or its designee, currently the Securities Information Center (SIC), to maintain records of lost, counterfeit, missing, or stolen securities. This rule was created in an effort to reduce trafficking in lost, stolen, missing, and counterfeit securities. The database of securities maintained by the SIC can only be accessed by registered BDs and other financial institutions to ascertain if securities that have come into their possession have been reported as lost, stolen, missing, or counterfeit. No Criminal Action Suspected Upon discovery of the likely loss of a security, if no criminal action is suspected, Read more about Reporting And Inquiry for Lost, Counterfeit, Missing, and Stolen Securities[…]

Rule 147 Offerings

Posted on January 21, 2022 by admin

Rule 147, also known as the intrastate offering exemption, allows for firms to avoid registration with the SEC for intrastate offerings under certain conditions. This exemption seeks to facilitate the financing of local business operations for companies that are organized in the state where it is offering the securities, carry out a significant amount of its business in that state, and make offers and sales only to residents of that state. The Rule 147 exemption is available only if the entire issue is offered and sold exclusively to residents of that single state. If any sales take place to non-residents, Read more about Rule 147 Offerings[…]

Cybersecurity Exam Observations and Effective Practices

Posted on July 14, 2021 by admin

Cybersecurity remains one of the principal operational risks facing broker-dealers and Registered Investment Advisers. Accordingly, FINRA and the SEC’s examiners expect firms to have reasonably designed cybersecurity programs and controls consistent with the firm business model and scale of operations to ensure that sensitive data, including client information, is not lost or misused, or accessed by unauthorized users.

Examiners continue to inquire into the Firm’s controls regarding firewalls, vulnerability, penetration testing, and training during office examinations.

Investment Adviser Marketing Rule

Posted on July 12, 2021 by admin

Effective May 4, 2021, the SEC’s recently adopted amendment to rule 206(4)-1 of the Advisers Act went into effect. The Advertising Rule, 206(4)-1, which addressed how advisers marketed their services to clients and investors, had not been updated with any substance since it was adopted in 1961. The same is true for the “solicitation rule” adopted in 1979. The new investment adviser marketing rule amends the existing rule 206(4)-1, known as “the advertising rule,” and replaces rule 206(4)-3, the “solicitation rule.” The SEC believed it was appropriate to regulate both the investment adviser advertising and the solicitation activity of an adviser through a single rule: The Marketing Rule.

Regulators Focus on Reg BI During 2021 Audits

Posted on June 30, 2021June 30, 2021 by admin

The Securities and Exchange Commission adopted a new rule under the Securities Exchange Act of 1934 that established a standard of conduct for broker-dealers and the natural persons who are associated persons of a broker-dealer. It was established to enhance the broker-dealer’s standard of conduct to retail customers beyond the existing suitability obligation.

This standard of conduct takes critical principles from the underlying fiduciary obligations under the Investment Advisers Act of 1940. The SEC’s focus was regardless of whether a retail investor chooses a broker-dealer or an investment adviser, all retail investors should be entitled to a recommendation (by a broker-dealer) or advice (by an investment adviser) given in the best interest of the retail investor. It is essential to recognize that the term “retail investor” also includes Accredited Investors.

Schedule 13(d) and 13(g)

Posted on June 21, 2021 by admin

Sections 13(d) and 13(g) of the Securities Exchange Act of 1934 require certain market participants to file reports with the SEC. The reporting obligations under sections 13(d) and 13(g) generally focus on the concept of “beneficial ownership” and depend upon numerous factors, including the class and amount of securities acquired, and the purpose and intent with which the particular position is held. Generally, any person (including any entity) who is the “beneficial owner” of more than 5% of any class of equity securities, as defined in Rule 13d-1(i) of the Exchange Act, is subject to the beneficial ownership reporting requirements of section 13(d) of the Exchange Act.