Over the weekend, the Securities and Exchange Commission released the full text of Rule 206(4)-5 in Release No. IA-3043. I made few notes during the broadcast of the open meeting, but there were lots of unanswered questions. Rule 206(4)-5 is only 12 pages long, but Release IA-3043 also includes another 190 pages of commentary and … Read more »
The Changing Standard for an Accredited Investor
As financial reform has made its way through Congress there have been several proposed changes to the standard of what it takes to be an accredited investor. In 1982, the SEC prescribed the standard in Rule 501 of Regulation D: 5. Any natural person whose individual net worth, or joint net worth with that person’s … Read more »
Fourth of July and Compliance
With the Fourth of July on Sunday, most businesses are closed on July 5th. (We hate to waste a good holiday.) What better way to celebrate the independence of the United States than by taking the day off from work and watching stuff blow up. In colonial times, official proclamations were read from the Old … Read more »
Compliance Bits and Pieces – July 2
Early this week, some people expected fireworks to come from the Free Enterprise v. PCAOB decision. Instead, we got cheap package of sparklers. Fun for a few minutes, but unlikely to leave much of a lasting impression. Here are some interesting compliance-related stories from the past week. SEC Statement on Supreme Court’s Decision in FEF … Read more »
Cheap Sunglasses and Compliance
Can cheap sunglasses affect your ethical behavior? An important part of a compliance program is monitoring and improving the ethical behavior of your workforce. I’m always intrigued by ethics experiments. Francesca Gino of Chapel Hill, Michael Norton of Harvard Business School, and Dan Ariely of Duke tested the effect of wearing knock-off designer sunglasses. They … Read more »
SEC Votes on Pay to Play
At Wednesday’s Open Meeting the Securities and Exchange Commission took up the discussion of their proposed rules on pay-to-play for investment advisers. The proposal is a new Rule 206 (4)-5 under the Investment Advisers Act. The Commission voted unanimously to adopt the rule. The rule will have three main prongs: Two Year Time-Out An investment … Read more »
Should Private Funds Have more than $10 Billion?
The current draft of the Dodd-Frank Wall Street Reform and Consumer Protection Act has a surprise in it for big hedge funds. By “surprise” I mean tax. Title XVI: Financial Crisis Special Assessment has a $19 billion fee ready to be assessed against financial companies institutions with more than $50 billion in assets and hedge … Read more »
GRC Professional Survey
The folks at the Open Compliance & Ethics Group have been developing a professional education and certification program for governance, risk management and compliance professionals. Basically, it’s a program that helps to build on existing credentials and “round out” an executive’s skills so that they are more effective at integrating all of these processes (e.g., … Read more »
Final Text of the Private Fund Investment Advisers Registration Act of 2010
There is a lot happening in the Dodd-Frank Wall Street Reform and Consumer Protection Act. (Yes, that appears to be the agreed upon name of the financial reform bill.) I’m most interested in its Title IV: Private Fund Investment Advisers Registration Act of 2010(.pdf). The act will remove the current exemption from SEC registration for … Read more »
PCAOB is Fixed – May Take Other Agencies Down (or get Fixed)
In the Free Enterprise vs. PCAOB decision, the Supreme Court found that a double layer of limitation of firing for cause is unconstitutional. You can’t have an agency where the officers are only removable for cause under another federal agency whose members are only removable for cause. One level of protected tenure is acceptable, but … Read more »