The SDDco Client Update
The SDDco Client Update is an action oriented email prepared in-house, tailored to client needs, and sent as an adjunct to our online newsletter. Verified newsletter subscribers receive our Client Update once each month.
The SDDco Client Update is intended to provide general information only. It is not intended as, and should not be taken as, financial, tax, accounting, legal, consulting or any other type of advice specific to you or your firm. Users of the SDDco Client Update should not act or refrain from acting on the basis of information provided on the sddco.com website. Always check with your accountant and/or attorney.
The Public Company Accounting Oversight Board (PCAOB) issued a staff inspection brief on July 14, 2016, detailing the focus and objectives of its 2016 inspections of broker-dealers auditors. In 2016, inspection staff are focusing on the following broker-dealer audit areas and attestation procedures: “Auditor independence Financial statement areas with recurring deficiencies, including revenue, the assessment and response
SEC registered investment advisers (“RIAs”) may not accept performance fees from investors not considered a “Qualified Client” under Section 2015 of The Investment Advisers Act of 1940. Effective August, 15, 2016, the net worth threshold defining clients as qualified will increase by $100,000. The new net worth minimum will be $2,100,000. Currently, an RIA may
The Office of Compliance Inspections and Examinations (OCIE) at the SEC issued a Risk Alert detailing its 2016 initiative related to adviser share class recommendations and potential conflicts of interest (“Share Class Initiative”). The goal is to specifically identify conflicts related to fees received by registered investment advisers (“RIAs”) who recommend mutual fund and 529
FINRA member broker-dealers must monitor the external personal accounts of their associated persons. To facilitate oversight requirements, the SEC has approved FINRA’s proposed Rule 3210 to adopt a new and consolidated rule governing accounts opened or established by associated persons (“APs”) at firms other than the member firm at which an AP is employed or
Bad things can happen, and broker-dealers must have an after plan. FINRA requires that each member broker-dealer (“firm”) maintains a written business continuity plan (BCP) covering its anticipated response to a potential emergency or significant business disruption (“disruption”) varying in nature. Each firm needs to conduct its own risk analysis to determine critical exposures of
The Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission (CFTC) reminds futures commission merchants (FCMs) and introducing brokers (IBs) of their obligations to report suspicious activities to Financial Crimes Enforcement Network (FinCEN) and to comply with the economic sanctions programs imposed against countries and groups per the Office of
The staff of the Division of Investment Management (“Division staff”) guides proper business continuity planning for registered investment companies (“funds”). The update presents solid measures to consider as funds evaluate the robustness of their plan to mitigate business continuity risks for funds and investors. BCP Planning “Rule 38a-1 under the Investment Company Act of 1940