Securities Regulation

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Securities and Exchange Commission, SEC, Building in Washington DC

Three recent enforcement actions highlight the risks of failing to adhere to representations made to investors regarding ESG and biblically responsible investing strategies.

The upcoming change in US administration is expected to bring about significant priority shifts by the federal government, including at the US Securities and Exchange Commission (SEC). One area of potential overlap that the investment community should be prepared for, however, is in the realm of thematic investing. Citing its core mission to protect investors; maintain fair…

Securities and Exchange Commission, SEC, Building in Washington DC

Key risk areas for SEC registrants include standards of conduct, complex products, cybersecurity, digital engagement, and artificial intelligence.

By Latham & Watkins Investment Funds — Regulatory Strategy, Financial Regulatory, FinTech, and Commodities and Derivatives Regulation & Enforcement practices

On October 21, 2024, the Securities and Exchange Commission’s (SEC) Division of Examinations (the Division) published its annual examination priorities for 2025 (2025 Priorities), which focus on certain “practices, products, and services that the Division believes present potentially heightened risks…

Securities and Exchange Commission, SEC, Building in Washington DC

The SEC’s September 17, 2024, actions signal its commitment to penalize non-compliance, while encouraging market participants to self-report violations.

By Stephen Wink, John Sikora, Aaron Gilbride, Naim Culhaci, and Samantha Daisy

On September 17, 2024, the US Securities and Exchange Commission (SEC) announced charges against 11 institutional investment managers for failing to file Forms 13F and 13H. All parties settled the charges. These charges signal the SEC’s willingness to bring enforcement actions and impose sanctions against…

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FINRA’s guidance sheds further light on the new rule, which will permit firms to elect “non-branch” designation for a private residence where an associated person conducts specified supervisory activities.

By Marlon Q. Paz, Naim Culhaci, and Donald Thompson

The Financial Industry Regulatory Authority (FINRA) has issued much-needed guidance on residential supervisory locations (RSLs). The new guidance supplements its January 23, 2024, Regulatory Notice 24-02 (Reg. Notice 24-02) on new supplementary material .19 under FINRA Rule…

Securities and Exchange Commission, SEC, Building in Washington DC

SEC defines the phrase “as part of a regular business” to capture private funds and other market participants that take on liquidity-providing roles.

By Marlon Q. Paz, Stephen P. Wink, Naim Culhaci, and Jessmine Lee

The Securities and Exchange Commission (SEC) adopted new rules that expand the definition of “dealer” and “government securities dealer” under the Securities Exchange Act of 1934 (Exchange Act), requiring registration by market participants that take on significant liquidity-providing roles. The February 6…

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The new rule establishes criteria for firms to elect “non-branch” designation for a private residence where an associated person engages in specified supervisory activities.

By Marlon Q. Paz, Naim Culhaci, Donald Thompson, and Jessmine Lee

On January 23, 2024, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 24-02 (Reg. Notice 24-02), announcing guidance and effective dates on two recently approved supplementary materials under FINRA Rule 3110:

  1. FINRA Rule 3110.19, enabling firms to
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Securities and Exchange Commission, SEC, Building in Washington DC

Regulation SE, the last of the Title VII Dodd-Frank rulemakings, will become effective on February 13, 2024.

The Securities and Exchange Commission (SEC) has taken a significant step in enhancing the regulatory landscape of the financial markets by adopting new Regulation SE (17 CFR 242.800 through 242.835) under the Securities Exchange Act of 1934 (Exchange Act). The final rules establish a comprehensive framework for the registration and oversight of security-based swap execution facilities (SBSEFs) in compliance with Title VII of…

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The proposed amendment seeks to modify the existing framework of FINRA Rule 2210 to accommodate the use of certain projections and targeted returns.

By Stephen P. Wink, Marlon Paz, Gail Neely, Naim Culhaci, Matthew Lee, and Deric Behar

On November 13, 2023, the Financial Industry Regulatory Authority (FINRA) filed a proposed rule change with the Securities and Exchange Commission (SEC) to amend FINRA Rule 2210. If adopted, the amendment would permit FINRA-regulated firms to include certain performance projections or targeted returns with respect to a security or asset allocation or other investment strategy in their communications with certain recipients.

Securities and Exchange Commission, SEC, Building in Washington DC

The priorities highlight emerging and core risk areas for investment advisers, broker-dealers, and other entities, including cybersecurity and crypto assets.

By Laura Ferrell, Aaron Gilbride, Marlon Q. Paz, Jamie Lynn Walter, Stephen P. Wink, Naim Culhaci, and Deric Behar

On October 16, 2023, the Securities and Exchange Commission’s (SEC) Division of Examinations (the Division) published its annual examination priorities for 2024 (2024 Priorities), which focus on “certain practices, products, and services that [the Division] believes present potentially heightened risks to investors or the integrity of the U.S. capital markets.” The Division will prioritize areas that pose emerging risks to investors or the markets, as well as examinations of core and perennial risk areas. The 2024 Priorities include certain of these focus areas, but are not an exhaustive list.

The 2024 Priorities are primarily organized by entity, with just four thematic topics broken out separately as applicable to a wide range of market participants: (1) information security and operational resiliency; (2) crypto assets and emerging financial technology; (3) regulation systems compliance and integrity; and (4) anti-money laundering. Notably, ESG was not specifically identified as a priority in adviser reviews for the first time in years.

The Division will continue to prioritize examinations of advisers and investment companies that have never been examined, including new registrants, as well as those that have not been examined for a number of years.

The amendments aim to modernize the Names Rule and promote investor protection objectives by ensuring that a fund’s portfolio of holdings aligns with its name.

By Laura N. Ferrell, Sarah E. Fortt, Betty M. Huber, Paul A. Davies, Nicola Higgs, Anne Mainwaring, Karmpreet (Preeti) Grewal, Austin J. Pierce, and Deric Behar

The US Securities and Exchange Commission has adopted amendments to Rule 35d-1 under the Investment Company Act governing naming conventions for…