The SEC published its schedule of upcoming activity for implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act). While the calendar is tentative, many of the activities are tied to deadlines imposed by the Act.
The schedule details the SEC’s plans to engage in the following rulemaking:
There are also a slew of studies required by the Act. Advisers should pay particular attention to the following two studies:
- Eliminate the registration exemption for certain advisers to private funds.
- Implement the transition of advisers with assets under management from $25 to $100 million from SEC to state regulation.
- Revise the “accredited investor” standard under Regulation D, which regulates who may invest in private funds.
- Adjust the threshold for “qualified client” under the Advisers Act. Advisers may only charge performance-based fees to those who fall under this definition.
- Implement a Whistleblower Incentives & Protection Program.
We will update our clients on important developments in the implementation of the Act as they arise.
- The Act directs the SEC to conduct a study on the obligations of broker-dealers who provide personalized investment advice to retail clients. The SEC must examine the existing standard of care to which broker-dealers must adhere and the gaps between the regulation of advisers and broker-dealers. The findings of this study are expected to help the SEC harmonize the regulations that govern advisers and broker-dealers who provide personalized investment advice. Advisers are watching developments of this issue closely, and industry groups are lobbying the SEC to ensure the existing fiduciary duty standard imposed on advisers is not affected by any new rulemaking.
- The SEC must conduct a study on the need for enhanced resources for investment adviser examinations and enforcement. Specifically, the Act requires the SEC to contemplate an SRO to augment the agency’s oversight of investment advisers. This is obviously of serious concern to advisers, as the study may conclude to appoint FINRA or a newly formed SRO to take over the examination and enforcement of advisers.