SEC Rulemaking & Guidance

SEC’s Disclosure Review Office Provides Tailored Shareholder Report Guidance

On Nov 8, the SEC’s Division of Investment Management’s Disclosure Review and Accounting Office (DRAO) provided their observations after reviewing the initial tailored shareholder report filings.  The Accounting and Disclosure Information (ADI) is meant to remind funds of certain requirements and flag common issues to ensure a smooth transition to these new requirements and to ensure investors receive the required information to help them make informed investment decisions and monitor their fund investments. DRAO expects to update this page from time to time to include additional information.

The ADI is available here: https://www.sec.gov/about/divisions-offices/division-investment-management/accounting-disclosure-information/adi-2024-14-tailored-shareholder-report-common-issues

 Amendments to Certain Rules in the Covered Clearing Agency Standards – Final Rules

On Oct 25, the SEC adopted rule amendments and a new rule to improve risk management and resilience of covered clearing agencies (CCAs).  These new requirements for CCAs include:

• Policies and procedures to establish risk-based margin systems for CCAs that provide central counterparty services; and

• Recovery and orderly wind-down plans (RWPs) with content requirements including elements related to planning, timing, implementation, testing and board approval.

Compliance Date:  The SEC adopted two compliance dates: (1) 150 days after publication in the Federal Register for a covered clearing agency to file any required proposed rule changes or advance notices with the Commission; and (2) 390 days after publication in the Federal Register for such proposed rule changes and advance notices to be effective.

The Press Release, Fact Sheet and Adopting Release are available here: https://www.sec.gov/newsroom/press-releases/2024-176

 SEC Announces New Members of Small Business Capital Formation Advisory Committee

On Oct 30, the new committee members were announced-

• Jennifer Newton – Managing Attorney and Founder, StartSmart Counsel; Miami
• Rose Standifer – Partner, Foley Hoag LLP; Denver
• Wendy Stevens – Partner, Forvis Mazars LLP; New York
• Emily Underwood – Clinical Professor of Law, Bluhm-Helfand Director of the Innovation Clinic, The University of Chicago Law School; Chicago

The committee provides advice and recommendations to the Commission on rules, regulations, and policy matters relating to small businesses, including smaller public companies

The Press Release and more information about the committee is available here: https://www.sec.gov/newsroom/press-releases/2024-177

SEC’s Division of Exams Fiscal Year 2025 Examination Priorities

On Oct 21, the SEC’s Division of Exams published their exam priorities for 2025. 

In the press release, the Division stated that “[i]n addition to conducting examinations in core areas such as disclosures and governance practices, the Division will also examine for compliance with new rules, the use of emerging technologies, and the soundness of controls intended to protect investor information, records, and assets.”

The Press Release and Exam Priorities are available here:

https://www.sec.gov/files/2025-exam-priorities.pdf

SEC Risk Alert - Registered Investment Companies:  Review of Certain Core Areas and Associated Documents Requested

On Nov 4, the SEC’s Division of Examinations published a Risk Alert providing insight regarding the examination process for funds and includes an attachment outlining the types of documents and information they typically requested by examination staff.  Examination observations related to certain core review areas, including fund compliance programs, fund disclosures and filings, fund governance practices are also highlighted

The Risk Alert is available here: https://www.sec.gov/files/risk-alert-registered-investment-companies.pdf

The SEC Inspector General Annual Report

On Nov. 4, the SEC’s Office of the Inspector General published their Annual Report with their independent perspective on the agency’s top management and performance challenges.

The Report is available here:  https://www.sec.gov/files/statement-secs-management-performance-challenges-october-2024.pdf

FINRA

Regulatory Notice 24-13 – RFI on Effectiveness and Efficiency of Day Trading

On October 29, FINRA published Reg Notice 24-13, requesting comment on the effectiveness and efficiency of its requirements relating to day trading.  The notice included a summary of the rules, their rule review process, and specific questions they seek responses.

Comment Period:  January 28, 2025

The Reg Notice and Request for Comment are available here: https://www.finra.org/rules-guidance/notices/24-13

 Regulatory Notice 24-12 – Amendments to Rule 3240

On October 23, FINRA published Reg Notice 241-12, adopting amendments to Rule 3240 (Borrowing From or Lending to Customers).  The amendments strengthen the rule’s general prohibition against borrowing and lending arrangements between registered persons and their customers, narrow some existing exceptions to the general prohibition, modernize the “immediate family” definition, and enhance the notice and approval requirements related to permissible arrangements.

Compliance Date:  The amendments will become effective on April 28, 2025.

The Notice and Amendments are available here:  https://www.finra.org/rules-guidance/notices/24-12

 FINRA Foundation Study on GenX Investors

In October, the FINRA Foundation published a study comparing GenX (the “forgotten generation”) to other generations.  The study examines the financial health of Gen Xers and finds that while overall, Gen Xers report good financial health given their life stage, few Gen Xers report positive feelings about their financial situation

The Study is available here:

https://www.finrafoundation.org/sites/finrafoundation/files/2024-10/how-gen-x-compares-financially-to-other-generations-oct2024.pdf

Retirement

The DOL’s ERISA Council – Fall Meeting

On October 22, the DOL ERISA Council met and discussed two topics, “Making Welfare Plan Claims and Appeals Procedures More Accessible to Participants” and “Lifetime Income and Qualified Defined Investment Alternatives.”

The Issue Statements are available here:

Claims and Appeals Procedures Issue Statement

Qualified Default Investment Alternatives (QDIAs) - Start to Finish, Default to Payout