Insights
Chapman wrote the book on the marketplace lending regulatory landscape that the entire industry has come to rely upon. First published in 2013, the 2024 update covers a vast array of topics affecting the marketplace lending industry.
The Division of Examinations of the Securities and Exchange Commission published its examination priorities for fiscal year 2025. The 2025 Exam Priorities reflect practices, products, and services the Division believes present heightened risks to investors and the U.S. capital markets.
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There have been several recent notable enforcement actions, including continued enforcement by the SEC and CFTC against off-channel communications, as well as an SEC fraud settlement with Macquarie Investment Management Business Trust.
Chapman's quarterly Regulatory Update contains an overview of the latest regulatory actions, market happenings, and litigation and enforcement activity in the investment management space.
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On September 12, 2024, the Commodity Futures Trading Commission (CFTC) adopted amendments to CFTC Regulation 4.7 (Reg. 4.7), a rule that provides exemptions from the broader compliance requirements under Part 4 of the CFTC regulations (Part 4) for registered commodity pool operators (CPOs) with respect to pools (4.7 pools) offered solely to “Qualified Eligible Persons” (QEPs) and registered commodity trading advisors (CTAs) that advise or manage commodity trading accounts of QEPs. The amendments (i) increase the financial thresholds in the “Portfolio Requirement” of the QEP definition and (ii) permit CPOs of fund of fund pools offered solely to QEPs to provide monthly account statements within 45 days of the month-end, rather than providing quarterly account statements within 30 days of the quarter-end. The CFTC chose not to adopt, at this time, the proposed minimum QEP disclosures.
A recognized securities and commodities regulatory authority, Peter’s practice focuses on the registration and regulation of investment advisers, broker-dealers, commodity trading advisors, commodity pool operators, and introducing brokers, as well as the formation and ongoing compliance obligations of registered and private investment companies.
Chapman's 2024 Social Impact and Sustainability report showcases our commitment to the United Nations Global Compact (UNGC).
On August 22, 2024, a proposed rule (the “Proposed Joint Rule”) mandated by the Financial Data Transparency Act of 2022 (the “FDTA”) and adopted by nine federal financial regulators, including the U.S. Securities and Exchange Commission (the “SEC” and, together with the other eight regulators, the “Covered Agencies”), was published in the Federal Register.
Chapman's white paper provides a summary of the interval fund and tender offer fund structures, including their basic legal framework, their investment restrictions, how they are distributed and how they facilitate redemptions. It also provides a comparison of interval funds and tender offer funds, both to each other and to other types of investment companies.
- Topic: SEC
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The Division of Examinations of the Securities and Exchange Commission published its examination priorities for fiscal year 2025. The 2025 Exam Priorities reflect practices, products, and services the Division believes present heightened risks to investors and the U.S. capital markets.
There have been several recent notable enforcement actions, including continued enforcement by the SEC and CFTC against off-channel communications, as well as an SEC fraud settlement with Macquarie Investment Management Business Trust.
Chapman's quarterly Regulatory Update contains an overview of the latest regulatory actions, market happenings, and litigation and enforcement activity in the investment management space.
On August 22, 2024, a proposed rule (the “Proposed Joint Rule”) mandated by the Financial Data Transparency Act of 2022 (the “FDTA”) and adopted by nine federal financial regulators, including the U.S. Securities and Exchange Commission (the “SEC” and, together with the other eight regulators, the “Covered Agencies”), was published in the Federal Register.
Chapman acted as counsel on the registration and listing of two of the first eight spot Ethereum (ether) exchange-traded funds (ETFs) to begin trading in the United States, following the U.S. Securities and Exchange Commission (SEC) declaring the registration statements for the ether ETFs effective on July 22, 2024.
Earlier this month, the United States Securities and Exchange Commission (“SEC”) finalized a long-awaited rule that mandates climate-related disclosures by public companies and in public offerings. See here. The rule does not apply to public asset-backed securities (“ABS”) issuers and the SEC has stated that it will continue to review climate disclosures related to these issuers.
Earlier this month, the United States Securities and Exchange Commission (“SEC”) finalized a long-awaited rule that mandates climate-related disclosures by public companies and in public offerings. See here. The SEC’s rule is already facing legal challenges, including a recent ruling that temporarily blocks the rule from taking effect.
On November 27, 2023, the US Securities Exchange Commission (“SEC”) adopted final Securities Act Rule 192 (“Final Rule 192”) prohibiting certain conflicts of interest in securitization transactions. In general, Final Rule 192 prohibits a “securitization participant” with respect to an “asset-backed security” (“ABS”) from directly or indirectly engaging in any “conflicted transaction” during the applicable prohibition period.
Chapman acted as counsel on the registration and listing of three of the first spot bitcoin exchange-traded funds (ETFs) to launch in the United States, which received approval from the U.S. Securities and Exchange Commission (SEC) on January 10, 2024.
Chapman's quarterly Regulatory Update contains an overview of the latest regulatory actions, market happenings, and litigation and enforcement activity in the investment management space.
Chapman's quarterly Regulatory Update contains an overview of the latest regulatory actions, market happenings, and litigation and enforcement activity in the investment management space.
On March 15, 2023, the U.S. Securities and Exchange Commission (“SEC”) issued a series of proposals designed to improve firms’ preparedness and responses to cyber incidents. The proposals, which would impact many of the financial services industry participants regulated by the SEC, generally require that firms establish policies and procedures to better prevent and detect cyber incidents and disclose certain cyber incidents to clients and the SEC within specified time periods.
On January 25, 2023, the U.S. Securities and Exchange Commission (“SEC”) issued a proposed rule to prevent and avoid material conflicts of interest in certain securitization transactions. The rule would prohibit securitization participants from engaging in certain transactions that could incentivize structuring an asset-backed securities (“ABS”) transaction in a way that would put the securitization participant’s interests ahead of the interests of the ABS investors.
On February 22, 2023, the New York Stock Exchange (“NYSE”) proposed the adoption of new listing standards contained in the Corporate Governance section of the NYSE Listed Company Manual (the “Manual”). New Section 303A.14 would “require issuers to develop and implement a policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers.”
On February 15, 2023, the U.S. Securities and Exchange Commission (the “SEC”) adopted rule changes to Exchange Act Rule 15c6-1, shortening the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade date (T+2) to one day (T+1).
On February 15, 2023, by a vote of 4 to 1 with only Commissioner Peirce voting no, the U.S. Securities and Exchange Commission proposed to amend the content of Rule 206(4)-2 under the Investment Advisers Act of 1940 (the “Advisers Act”), known as the Custody Rule, and redesignate it as Rule 223-1 under the Advisers Act, now known as the Safeguarding Rule. If adopted, the proposal would, among other things, expand the coverage of the Advisers Act’s custody provisions beyond “client funds and securities” to include any client assets of which an adviser has custody, a change that would bring within the rule’s coverage all digital assets, including non-securities such as commodities. Such a change would impose a requirement on many investment advisers that hold client assets to place those assets with a “qualified custodian,” despite a current lack of widespread availability of such service providers for many digital assets.
On April 19, the House Financial Services Committee posted a “discussion draft” of a revised version of the CHOICE Act. The discussion draft contains most of the provisions in last year’s bill with a number of important changes.
- February/March 2017Pratt's Journal of Bankruptcy Law
With Republicans retaining control of both chambers of Congress and Donald Trump elected President, the prospects for financial regulatory reform have changed. Many observers point to the Financial CHOICE Act as the best indication of Republican Congressional aspirations for such reform.
On January 10, 2017, the Securities and Exchange Commission (SEC) issued a cease-and-desist order (Order) to the Port Authority of New York and New Jersey (Port Authority) under which the Port Authority acknowledged that it acted negligently in failing to disclose certain risks in official statements for over $2.3 billion of bonds issued between January 2012 and June 2014.
The Securities and Exchange Commission is seeking comments on proposed Financial Industry Regulatory Authority, Inc. rule changes that would require members to disclose bond mark-ups and mark-downs on retail customer trade confirmations.
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued a Risk Alert announcing that they will be undertaking an examination initiative focused on the risk that registered advisers may be making conflicted recommendations to their clients.
The Securities and Exchange Commission recently published a notice of its intention to adjust for inflation dollar amount thresholds for the “qualified client” definition under Investment Advisers Act of 1940 Rule 205-3. Under Rule 205-3, an investment adviser may charge performance-based fees to a “qualified client” meeting a minimum net worth or minimum assets.
- Client Alert
On March 9, 2016, the U.S. Securities and Exchange Commission issued a cease and desist order against Westlands Water District, a public agency of the State of California, the District General Manager and General Counsel, and the former District Assistant General Manager.
The staff of the Securities and Exchange Commission’s Division of Investment Management recently released guidance regarding registered investment company risk disclosure.
- Client Alert
In this article, we provide a brief overview of the key reforms under Regulation AB II, followed by a more focused review of the next compliance hurdle that ABS issuers will face — annual compliance checks to determine continued shelf eligibility.
- Client Alert
On February 10, 2016, the Government Finance Officers Association alerted its members that the Enforcement Division of the Securities and Exchange Commission has begun contacting issuers in connection with its Municipalities Continuing Disclosure Cooperation initiative.
- Client Alert
On February 2, 2016, in the third round of settlements with underwriters under its Municipalities Continuing Disclosure Cooperation initiative, the Securities and Exchange Commission issued cease-and-desist orders to 14 underwriting firms.
This Client Alert briefly summarizes some of the primary issues that advisers might consider in their 2016 annual review and update processes.
On January 6, 2016, the staff of the Securities and Exchange Commission’s Division of Investment Management released guidance regarding registered open-end investment company payments to certain financial intermediaries that provide shareholder and recordkeeping services for investors. The staff’s guidance is designed to help fund boards oversee and evaluate whether sub-accounting fees are for distribution or non-distribution services.
- Client Alert
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently released its Examinations Priorities for 2016. Firms should review their policies, procedures and business activities in light of OCIE’s stated 2016 priorities.
- Client Alert
The Securities and Exchange Commission recently approved a proposed rule change by the Financial Industry Regulatory Authority, Inc. that would amend FINRA Rule 2210 to require each of a member’s websites to include a readily apparent reference and hyperlink to BrokerCheck.
- Client Alert
On September 30, 2015, in the second round of settlements with underwriters under its Municipalities Continuing Disclosure Cooperation initiative, the Securities and Exchange Commission issued cease-and-desist orders to 22 underwriting firms.
The Financial Industry Regulatory Authority, Inc. recently filed a proposed rule change with the Securities and Exchange Commission to apply FINRA rules on bond mark-ups and commissions to transactions in exempted securities that are government securities.
The Securities and Exchange Commission recently proposed new rules and amendments designed to enhance liquidity risk management requirements for certain open-end management investment companies, including mutual funds and exchange-traded funds.
- Client Alert
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued a Risk Alert summarizing deficiencies in controls of certain broker-dealers related to sales of structured products to retail investors.
- Client Alert
The Securities and Exchange Commission is seeking comments on proposed rule changes by the Financial Industry Regulatory Authority, Inc. addressing external personal accounts opened or established by associated persons of FINRA member firms.
- Client Alert
The Securities and Exchange Commission recently published orders approving two rule proposals by the Financial Industry Regulatory Authority, Inc. governing equity and debt research analysts and research reports.
- Client Alert
The Securities and Exchange Commission is seeking comments on a proposed rule change by the Financial Industry Regulatory Authority, Inc. that would amend FINRA Rule 2210 (Communications with the Public).
- Client Alert
The Securities and Exchange Commission recently set the compliance date for the ban on certain payments to third-party solicitors under Rule 206(4)-5 of the Investment Advisers Act of 1940 as July 31, 2015.
- Client Alert
The staff of the Securities and Exchange Commission’s Division of Investment Management recently published guidance on investment adviser Code of Ethics exceptions to personal securities transaction reporting for securities transactions occurring in certain types of trusts or investment management accounts where the beneficiary or account holder has limited or no discretionary investment authority.
- Client Alert
On June 18, 2015, the Securities and Exchange Commission issued cease-and-desist orders to 36 underwriting firms in response to voluntary self-reporting of potential misrepresentations in municipal bond offering documents regarding compliance by issuers with prior disclosure obligations under the SEC’s Municipalities Continuing Disclosure Cooperation initiative.
- Client Alert
On June 18, 2015, the Securities and Exchange Commission issued cease-and-desist orders to 36 underwriting firms in response to voluntary self-reporting of misrepresentations in municipal bond offering documents regarding compliance with prior disclosure obligations under its Municipalities Continuing Disclosure Cooperation initiative.
- Client Alert
On June 12, 2015, the Securities and Exchange Commission issued a release seeking public comment to help inform its review of the listing and trading of new, novel, or complex exchange-traded products.
- Client Alert
This Client Alert summarizes the Securities and Exchange Commission proposed changes to certain aspects of the reporting, disclosure, and recordkeeping obligations of registered investment advisers.
- Client Alert
This Client Alert summarizes the Securities and Exchange Commission proposed changes to certain aspects of the disclosure and reporting obligations of registered investment companies.
- Client Alert
The staff of the Securities and Exchange Commission’s Division of Investment Management recently published guidance for registered investment advisers and registered investment companies related to cybersecurity preparedness in their business practices.
- Client Alert
The Securities and Exchange Commission staff recently announced an initiative to conduct examinations of registered investment company complexes that have not previously been examined.
- March 2015White Paper
This Chapman and Cutler white paper provides a summary of, and practical guide to, the principal requirements of federal securities laws relating to municipal bonds. Much of the information discussed in this white paper applies to both higher education bonds and other municipal securities, while certain sections focus on securities laws as applied to the high education sector, in particular.
The staff of the Securities and Exchange Commission recently issued guidance to remind affiliates of registered investment companies that the receipt of gifts or entertainment may violate Section 17(e)(1) of the Investment Company Act of 1940.
The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued its 2015 Regulatory and Examinations Priorities Letter.
The Securities and Exchange Commission recently issued a no-action letter which grants relief to broker-dealers, allowing them to rely on investment advisers to perform some or all of their Customer Identification Program obligations under federal anti-money laundering legislation.
- Client Alert
The Securities and Exchange Commission approved the Municipal Securities Rulemaking Board’s proposal to implement a “best execution” standard for municipal securities transactions.
- Client Alert
Issuers and obligated persons are reminded of the approaching deadline for self-reporting materially inaccurate representations in offering documents regarding compliance with continuing disclosure undertakings.
In August 2014, the SEC adopted final rules under Regulation AB that substantially revise the offering process, disclosure and reporting requirements for offerings of ABS. More than four years after the SEC originally published its comprehensive "Regulation AB II" rule proposals, and after two partial re-proposals in 2011 and 2014, the final rules implement several key areas of reform but defer action on other significant aspects of the original proposals.
- Client Alert
The Securities and Exchange Commission is seeking comments on the first ever explicit “best execution” rule for municipal securities transactions proposed by the Municipal Securities Rulemaking Board.
- Client Alert
The SEC announced modifications to its Municipalities Continuing Disclosure Cooperation Initiative on July 31, 2014.
- Client Alert
On July 8, 2014, the Securities and Exchange Commission issued its first cease-and-desist order under its Municipalities Continuing Disclosure Cooperation initiative.
- Client Alert
In 2013, the Securities and Exchange Commission brought a number of enforcement actions in the municipal market that not only reinforced the agency’s commitment to regulating the municipal market, but also brought about a number of firsts for the SEC’s municipal securities enforcement program.
- Client Alert
On May 19, 2014, the Staff of the Office of Municipal Securities of the Securities and Exchange Commission issued additional guidance on the SEC’s registration rules for municipal advisors.
- Client Alert
The Financial Industry Regulatory Authority, Inc. recently filed proposed advertising rule changes with the Securities and Exchange Commission.
- Client Alert
If your firm is a registered investment adviser that has never been examined by the Securities and Exchange Commission, you might want to prepare to see SEC examiners in the near future.
- Client Alert
With fixed income markets already in decline in May 2013, speculation regarding Federal Reserve action reached a pinnacle in the last half of June, sparking a bond market selloff of historic proportions.
- Client Alert
On January 10, 2014, the Staff of the Office of Municipal Securities of the Securities and Exchange Commission released additional guidance on the SEC’s registration rules for municipal advisors in the form of responses to Frequently Asked Questions.
- Client Alert
Today the Securities and Exchange Commission announced that it is delaying until July 1, 2014 the compliance date of the recent final rule requiring registration of municipal advisors under the Dodd-Frank Act.
- Client Alert
The Securities and Exchange Commission has released interpretive guidance on the final rules for the registration of municipal advisors.
- Client Alert
The SEC’s final municipal advisor registration rules will become effective on January 13, 2014. The SEC rules have created controversy within the municipal bond community about whether an underwriter will continue to be able to visit clients and pitch ideas without being prohibited from underwriting a resulting bond issue under MSRB Rule G-23.
- Client Alert
The SEC’s final municipal advisor registration rules will be published in the Federal Register on November 12, 2013, with an effective date of January 13, 2014.
- Client Alert
On September 18, 2013, the Securities and Exchange Commission adopted final rules for registering municipal advisors.
- Client Alert
On June 5, 2013, the SEC proposed certain amendments to Rule 2a-7, which is the primary rule governing money market mutual funds under the Investment Company Act of 1940.
- Client Alert
The Commodity Futures Trading Commission recently adopted final rules regarding compliance obligations for commodity pool operators of investment companies registered under the Investment Company Act of 1940.
- Client Alert
The Securities and Exchange Commission recently proposed rules to eliminate the prohibition against general solicitation and general advertising in securities offerings conducted in reliance on Rule 506 of Regulation D and Rule 144A under the Securities Act of 1933, as directed by the Jumpstart Our Business Startups Act. The proposed rules are intended to create increased opportunities for private companies, including private funds, to reach a larger and broader potential investor audience. Comments on the proposed rules are due by October 5, 2012.
- Client Alert
The Securities and Exchange Commission recently approved the Municipal Securities Rulemaking Boardʼs proposed interpretative notice on the obligations of underwriters to municipal securities issuers under the fair dealing and anti-fraud provisions of MSRB Rule G-17. The Notice establishes a comprehensive code of conduct for underwriters in their dealings with municipal entities and imposes detailed disclosure obligations relating to the underwriterʼs role, compensation, and conflicts of interest, as well as the risks associated with complex municipal securities financings. The Notice takes effect on August 2, 2012.
- Client Alert
On May 4, 2012, the Securities and Exchange Commission approved the Municipal Securities Rulemaking Boardʼs proposed interpretative guidance on the obligations of underwriters to municipal securities issuers under the fair dealing and anti-fraud provisions of MSRB Rule G-17. The guidance establishes a comprehensive code of conduct for underwriters in their dealings with municipal entities and imposes detailed disclosure obligations relating to the underwriterʼs role, compensation, and conflicts of interest, as well as the risks associated with complex municipal securities financings. The guidance also addresses underwritersʼ representations to issuers, review of official statements, and compensation, as well as fair pricing retail order periods. The guidance will be effective on August 2, 2012.
- Client Alert
The Securities and Exchange Commission recently approved a rule change proposed by the Financial Industry Regulatory Authority, Inc. relating to the “best execution” obligation of broker-dealers.