On October 28th, the SEC adopted a new rule and rule revisions to the regulatory framework for derivatives usage under the Investment Company Act. The enhancements will provide an updated and thorough approach to the regulation of registered investment funds’ derivatives usage that reflects developments over the past decades and focuses on investor protection matters. The Investment Company Act generally limits registered funds and business development companies from engaging in transactions that involve potential future payment obligations. This may include obligations under derivatives such as forwards, futures, swaps and written options. The new rule allows funds to enter into these transactions if they comply with conditions designed to protect investors, such as adopting a derivatives risk management program and complying with a limit on the amount of leverage-related risk that the fund may obtain based on value-at-risk (VaR). Continue reading "SEC Revises Regulations for Derivatives Usage..." »

On October 22nd, the SEC and the Commodity Futures Trading Commission (CFTC) convened for their first collaborative open meeting to vote on rulemaking efforts. The meeting embodies the agencies’ ongoing efforts to further achieve their shared regulatory objectives and better serve the markets and investors while exploring potential opportunities for efficiencies in portfolio margining. The markets the agencies regulate are extremely interconnected, making coordination vital to regulatory effectiveness. Continue reading "SEC, CFTC Approve Final Rule on Security..." »

On October 22, the SEC announced that it will host “Women of Color Entrepreneurs on Being Powerful Voices for Access to Capital” on October 28, 2020 at 7 p.m. ET. The virtual forum is a collaborative effort between the SEC’s Atlanta and Los Angeles Regional Offices, and the panel will be moderated by the SEC’s Office of the Advocate for Small Business Capital Formation. Continue reading "SEC to Host Virtual Panel with Women..." »

On October 16th, the SEC announced that it approved final rule amendments to revise certain auditor independence requirements in Rule 2-01 of Regulation S-X. In May 2018, the SEC welcomed suggestions for other revisions to the independence requirements in its proposed rule for Auditor Independence with Respect to Certain Loans or Creditor/Debtor Relationships, which resulted in the December 2019 Proposing Release for Amendments to Rule 2-01. The initial independence requirements were adopted in 2000 with amendments last updated in 2003. Continue reading "SEC Revises Auditor Independence Rules" »

On October 16th, the SEC announced the agenda and panelists for the Monday, October 26th roundtable which will bring together SEC staff and the Financial Industry Regulatory Authority (FINRA). The event will feature the two groups presenting panels discussing initial observations on Regulation Best Interest and Form CRS. Continue reading "SEC Releases Agenda for October 26 Virtual..." »

Version 5.5b of all applications in the GoFiler Suite has been released. This release contains corrections and improvements for the new redlining format for inline XBRL documents and to better validate documents produced by other HTML software. Additionally, a number of improvements have been made to XDX processing for Risk Return documents and to add new tools to adjust the default contexts used to make facts for Level 1 through 3 facts.

Continue reading "New Release (5.5b) for the GoFiler Family of..." »

The SEC and the Commodity Futures Trading Commission (CFTC) announced that their agencies will be partnering to host a virtual open meeting on Thursday, October 22, 2020, at 10:00 am EDT. Continue reading "SEC and CFTC to Host a Virtual Joint Open..." »

The SEC has released a statement concerning inappropriate custom member use in XBRL pertaining to certain axes. The US GAAP reporting taxonomy has designated a limited set of permitted members for these axes. The SEC has observed that occasionally filers have inappropriately added custom members where they are not allowed. Continue reading "SEC Releases Statement about Inappropriate XBRL..." »

On October 7th, the SEC proposed a new limited, conditional exemption from broker registration requirements for “finders” who assist issuers with raising capital in private markets from accredited investors. If approved, the planned exemption would allow natural persons to participate in certain limited activities involving accredited investors without being registered as brokers with the SEC. The proposed exemptive order aims to help small businesses that face challenges raising the capital they need to grow and succeed, especially when they are located in areas that do not have established capital raising networks. It will also bring clarity to finders’ regulatory status in a personalized manner that focuses on the capital formation needs of certain smaller issuers while preserving investor protections. Continue reading "SEC Proposes Conditional Exemptive Order for..." »

On October 7th, the SEC adopted a new rule and related changes that will put into place a comprehensive regulatory framework for arrangements where funds invests in one or more other funds (“fund of funds” arrangements). The new rule reflects the decades of experience the SEC has with fund of funds arrangements and should foster a consistent and efficient rules-based regime for the formation and oversight of funds of funds. The new rule and amendments are being adopted under the Investment Company Act of 1940 and are designed to streamline and enhance the regulatory framework for fund of funds arrangements. The SEC also is rescinding Rule 12d1-2 under the Act and most exemptive orders granting relief from sections 12(d)(1)(A), (B), (C), and (G) of the Act. Finally, related amendments to Rule 12d1-1 under the Act and Form N-CEN are being implemented. Continue reading "SEC Makes Changes to Regulatory Framework for..." »

On October 7th, the SEC announced that it has rescheduled its compliance outreach program’s national seminar for investment companies and investment advisers. It will now take place on November 19, 2020. The compliance program is aimed at helping chief compliance officers (CCOs) and other senior personnel at investment companies and investment advisory firms improve their compliance programs for the protection of investors. Continue reading "SEC to Host Virtual National Compliance..." »

The SEC will be closed today, Monday, October 12th, in observance of Columbus Day. The EDGAR System will not receive, process or accept filings on this day. Filings with a due date of October 12th will be due the following business day. Continue reading "SEC Closed October 12th for Columbus Day" »

On October 5th, the SEC published a staff report entitled “US Credit Markets: Interconnectedness and the Effects of the COVID-19 Economic Shock”. This report focuses on the origination, distribution, and secondary market flow of credit across the US credit markets. In addition, the report addresses the manner in which the related interconnections in the credit markets operated given the impact of the COVID-19 pandemic. Along with releasing the report, SEC staff will host a roundtable on Interconnectedness and Risk in US Credit Markets to explore these and other related issues on the afternoon of October 14th.
Continue reading "SEC Releases Report on Credit Market..." »

On September 23rd, the SEC voted to adopt revisions to its congressionally mandated whistleblower program rules. The 2010 addition of Section 21F to the Securities Exchange Act of 1934 established the SEC’s whistleblower program, which authorizes the SEC to make monetary awards to eligible individuals who voluntarily provide original information about violations of the securities laws when it leads to successful SEC enforcement actions resulting in monetary sanctions over $1 million.
Continue reading "SEC Adds Clarity, Efficiency, and Transparency..." »

On September 28th, the SEC announced a new proposal to improve the operational transparency, system integrity, and regulatory oversight of alternative trading systems. These systems trade government securities and repurchase and reverse repurchase agreements on government securities. US government securities markets are among the most significant and liquid securities markets in the world. Including US Treasury securities and agency securities, government securities comprise more than half of the outstanding debt issuances in the US bond market. They therefore play a critical role in the US and global economies. During the latter half of 2019, the average daily trading volume in government securities was approximately $835 billion. In addition to seeking public opinion on regulating these markets, the SEC is also requesting comment on the regulatory framework for electronic platforms that trade corporate debt and municipal securities. Continue reading "SEC Proposes to Extend Regulations ATS and SCI..." »