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

The amendments have a substantial impact on private fund managers.

By Laura N. Ferrell, Aaron Gilbride, Michael Milazzo, Jamie Lynn Walter, Mike Hart-Slattery, and Haley Hohensee

On August 23, 2023, the Securities and Exchange Commission (SEC) adopted a final rule package (each a Rule, and together, the Rules) that modifies the regulation of private fund advisers under the US Investment Advisers Act of 1940, as amended (the Advisers Act).

Among other things, the Rules require

Form 13F filers will need to file their first Form N-PX covering the period of July 1, 2023, to June 30, 2024, by August 31, 2024.

By Stephen P. Wink, Naim Culhaci, Laura Ferrell, Aaron Gilbride, Matthew Lee, and Jacqueline Marie Rugart

Rule 14Ad1 of the Securities Exchange Act of 1934 (Exchange Act), which was adopted by the US Securities and Exchange Commission (SEC) last fall, and will become effective on July 1, 2024, will institute a new requirement for institutional investment managers that are required to file Form 13F pursuant to Section 13(f) of the Exchange Act (13F Filers) to additionally publicly report how they voted via proxy for certain executive compensation matters on Form N-PX. Previously, the requirement to publicly report proxy voting records through Form N-PX was generally limited to registered investment companies.

The narrower M&A broker exemption supersedes the 2014 M&A broker no-action letter while leaving state-level restrictions and foreign M&A broker relief unaffected.

By Marlon Q. Paz, Stephen P. Wink, Naim Culhaci, Donald Thompson, and Deric Behar

On March 29, 2023, the Securities Exchange Act of 1934 (Exchange Act) was amended to exempt certain “M&A brokers” from registration as broker-dealers with the US Securities and Exchange Commission (SEC). The amendment, Exchange Act Section 15(b)(13), signed into law on December 29, 2022, as part of the Consolidated Appropriations Act (H.R. 2617), largely codifies previously granted SEC Staff no-action relief, albeit with certain limitations. Like the prior no-action relief, the new legislation does not preempt state or territorial laws concerning broker-dealer registration.

Persons previously relying on the M&A broker no-action letter should carefully examine the new exemption and related existing state and foreign relief to determine what, if any, implications the new law poses with regard to continued reliance.

By Laura Ferrell, Marlon Q. Paz, Nabil Sabki, Stephen P. Wink, Naim Culhaci, and Deric Behar

On March 28, 2022, the US Securities and Exchange Commission (SEC) proposed rules (Proposing Release) that would require securities market participants that engage in dealer-like activities — such as a proprietary trading firm that engages in a routine pattern of buying and selling securities that has the effect of providing liquidity to other market participants — to register with the SEC, become a member of a self-regulatory organization (SRO), and comply with federal securities laws and regulatory obligations.

The amended definition could provide a new means for the SEC to regulate crypto platforms.

By Stephen P. Wink, Marlon Q. Paz, Naim Culhaci, Ian Irlander, and Deric Behar

We previously published a blog post on the set of proposed amendments (Proposal) issued on January 26, 2022, by the Securities and Exchange Commission (SEC) regarding the regulation of alternative trading systems (ATSs) that would, among other things, substantially expand the activities covered by the definition of an “exchange” as interpreted by Rule 3b-16 under the Exchange Act to capture “Communication Protocol Systems”. Whereas we previously offered our general views on the proposed expansion of definitions and resulting potential impact on the securities industry, now we turn specifically to the potential impact of the Proposal on platforms trading digital assets.

Updated on May 9, 2022.

The proposal would require certain systems and platforms currently not subject to any registration requirements to register as broker-dealers and ATSs.

By Stephen P. Wink, Marlon Q. Paz, Naim Culhaci, and Deric Behar

On January 26, 2022, the Securities and Exchange Commission (SEC) issued a set of proposed amendments (Proposal) regarding the regulation of alternative trading systems (ATSs) that would, among other things, substantially expand the definition of an “exchange” as interpreted by Rule 3b-16 under the Securities Exchange Act of 1934 (the Exchange Act) to capture “Communication Protocol Systems.” Specifically, Rule 3b-16’s interpretation of the “exchange” definition would be broadened in several meaningful aspects, including by removing the current requirement that a platform needs to bring together “firm orders” to be deemed an “exchange.”

The Proposal would have a significant impact on current practices surrounding the use of Rule 10b5-1 plans by public companies and insiders.

By Joel H. Trotter, Stephen P. Wink, Naim Culhaci, and Deric Behar

On December 15, 2021, the Securities and Exchange Commission (SEC) issued a set of proposed amendments (the Proposal) regarding the adoption of trading plans that qualify for the affirmative defense against liability for trading on the basis of material non-public information (MNPI) under Rule 10b5-1 under the Securities Exchange Act of 1934 (the Exchange Act). These proposed changes would impose additional requirements on public companies and insiders.

Significantly, the Proposal would require a waiting period or “cooling off period” of 120 days for the director or officer of a company (or 30 days for the company itself) between the adoption of a plan or an amendment to the plan and the effecting of trades under such plan. Moreover, the Proposal would prohibit the use of multiple overlapping plans. The Proposal would also introduce additional disclosure requirements regarding 10b5-1 plans and the charitable gifting of securities by insiders. In explaining its rationale for issuing the Proposal, the SEC stated that it aims “to address apparent loopholes in the [current] rule that allow corporate insiders to unfairly exploit informational asymmetries.”

This post provides a high-level summary of some of the changes that are being proposed.

As a major LIBOR transition milestone approaches, a Staff Statement provides key considerations for market participants regarding their obligations.

By Laura N. Ferrell, Marlon Q. Paz, Zach Lippman, and Deric Behar

On December 7, 2021, the Staff of the Securities and Exchange Commission (SEC) issued a statement (the Statement) on the transition away from the London Interbank Offered Rate (LIBOR). The transition away from LIBOR is reaching an inflection point as the publication of the USD LIBOR benchmark for the 1-week and 2-month USD LIBOR maturities and many non-USD LIBOR maturities cease immediately after December 31, 2021.[1] The SEC, like other regulators around the world, continues to emphasize its expectation that market participants understand the risks associated with LIBOR transition and take appropriate action to move to alternative rates in a manner that protects customers, counterparties, the firm itself, and the capital markets more broadly.