Client Alert

Investment Management Legal and Regulatory Update - October 2021

Latest developments: Funds

• SEC Proposes Enhanced Proxy Voting Disclosure
• Proposal Threatens Tax Benefits of ETFs

Latest Developments: Advisers

• SEC Risk Alert on Fixed Income Principal and Cross Trades
• SEC Risk Alert on Advisers Managing Client Accounts that Participate in Wrap Fee Programs 
  • Examinations Staff Observed Deficient Practices
  • Observed Practices to Assist With Compliance

Litigation/enforcement actions

• Mutual Fund Share Class Selection Disclosure Violations
  • SEC Orders Former Adviser to Return Over $900,000 to Clients
  • SEC Charges Adviser for Investing Wrap Fee Client Assets in Higher Cost Mutual Funds to Avoid Paying Transaction Costs
• SEC Chair Signals Possible Cybersecurity Rules Forthcoming as Advisory Firms Face Cyber-Related Enforcement Actions
  • Cetera Fined $300,000 For Safeguards Rule Violation
  • Cambridge Fined $250,000 for Safeguards Rule Violation
  • KMS Fined $200,000 for Safeguards Rule Violation
• Great-West Prevails in Appeal of Excessive Fee Challenge Case