FINANCIAL INSTITUTIONS REQUESTED TO CHECK RECORDS FOR TRANSACTIONS INVOLVING TERRORISTS
9.26.2001 In a press release, the SEC requested that financial institutions voluntarily review their records to identify any transactions or relationships that may potentially involve persons and entities listed in President Bush's executive order on terrorism.
Please click
http://www.sec.gov/news/headlines/recordsearch.htm
to access a copy of the SEC's press release.
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SEC AND STATES LAUNCH INVESTMENT ADVISER INFORMATION WEB SITE
9.25.2001 The SEC and the North American Securities Administrators Association launched a web site that allows investors to access information about investment advisers. The web site is called the Investment Adviser Public Disclosure or IAPD. Investors can access documents filed by more than 9000 advisers. Investors will be able to review any reported disciplinary problems of an adviser.
Of the 9000 advisers, 7300 are SEC-registered advisers. The remaining advisers are located in states that require non-SEC advisers to register over the IARD. This means that the number of advisers on the IAPD is expected to grow as more states require advisers to use the IARD filing system
Please click http://www.adviserinfo.sec.gov to access the IAPD.
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JOINT SEC/CFTC RULES GOVERNING MARGIN REQUIREMENTS AND CUSTOMER FUNDS PROPOSED
9.25.2001 The SEC and CFTC jointly proposed rules under the Commodity Futures Modernization Act of 2000 that govern the collection of customer margin for securities futures. In addition, the proposed rules would eliminate duplicate and conflicting regulations of the agencies that are related to the treatment of customer funds, securities and property. These modifications would apply to firms jointly regulated by the SEC and CFTC.
Please click http://www.sec.gov/rules/proposed/34-44854.htm
to access a copy of the SEC's release announcing the rule proposal.
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SEC DELAYS IMPLENTATION OF AFTER-TAX RULES
9.25.2001 The SEC announced that mutual funds will not be required to be in compliance with new after-tax disclosure rules until December 1, 2001. The rules were to have gone in effect on October 1, 2001. The main purpose of the delay is to allow fund complexes more time to resolve technical disagreements on how to calculate after-tax performance. The SEC action, however, did not delay the February 15, 2002 deadline on reporting after-tax results in fund prospectuses. The rules, which were adopted earlier this year, require funds to show how taxes impact the performance of the funds.
Please click http://www.sec.gov/rules/final/33-8010.htm to access the release announcing the delay in the rule implementation.
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INTERAGENCY WORKSHOP ON PRIVACY RULES TO BE HELD IN DECEMBER
9.24.2001 An interagency workshop will be held at the Federal Trade Commission in Washington, D.C. on the privacy rules under the Gramm-Leach-Bliley Act. The participating agencies are the Federal Reserve Bank, Department of Treasury, Federal Trade Commission, Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller, and the Office of Thrift Supervision. The workshop will discuss successful privacy notices, strategies for better communicating privacy policies and industry self-regulatory efforts.
Please click http://www.sec.gov/news/press/2001-98.txt for information about the workshop.
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FUND OF FUNDS' SURVEYS POSTED ON WEB SITE
9.21.2001 The Alternative Investment Management Association (AIMA) has an ongoing research project studying the fund of funds industry. It currently has posted three surveys on its web site. AIMA will send participants in the surveys a personalized summary showing how their answers compare to those of their peer groups. Areas covered include: diversification, advantages and disadvantages, liquidity, fees, and service providers.
To access the surveys, please click http://www.aima.org/aimasite/indexfrm.htm to access information about the surveys.
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SEC RELAXES NUMEROUS RULES IN RESPONSE TO TERROIST ATTACKS
9.21.2001 Days after the terrorist attacks on September 11, 2001 and then later on September 21, 2001, the SEC granted temporary relief to the securities industry from a number of SEC rules. Notable actions by the SEC included:
- Issuers could repurchase their securities without complying with volume and timing restrictions until September 28, 2001;
- Directors, officers and 10% shareholders could repurchase shares of their companies without complying with certain restrictions in Section 16(b) of the Securities Exchange Act of 1934;
- Deadlines for broker-dealers reporting order routing practices were extended;
- In-person director meeting requirements lifted temporarily; and
- Gave mutual funds the ability to borrow from non-bank entities and relaxed other borrowing restrictions.
Please click http://www.sec.gov/rules/other/34-44874.htm for a complete list of SEC actions and when the temporary lifting of the rules expire.
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MINNESOTA INVESTMENT ADVISER ORDERED TO DISGORGE FUNDS
9.21.2001 A Minnesota investment adviser was order to disgorge approximately $176,000, an amount the SEC had alleged the investment adviser misappropriated from investors. A Minnesota federal district court approved the settlement, which resulted in investors receiving the $176,000. Christopher Lowry, the investment adviser, sold stock of a start-up company he called 401(k) University. The SEC charged that he used a portion of the offering proceedings to purchase a new home.
Please click http://www.sec.gov/litigation/litreleases/lr17148.htm to access the release announcing the SEC enforcement action.
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MARKET INFORMATION REPORT ISSUED
9.13.2001 The Advisory Committee on Market Information issued a report calling for "consolidators" that would sell market information to vendors and subscribers. Under its plan, each market center would sell its market information to consolidators, which in turn make the information generally available.
The Advisory Committee on Market Information was formed at the request of the SEC in August, 2000. It is chaired by Joseph Seligman, Dean of the Washington University School of Law located in St. Louis, Missouri. The mission of the 25-person committee is to study issues relating to the public availability of information on trades in the equities and options markets. The SEC specifically wanted the Committee to analyze the importance of transparency.
The Committee concluded that transparency should be a core market objective and stated that the use of multiple consolidators could help market information be more transparent. Under current SEC rules, only one consolidator exists. Rule 11Ac1-2 under the Securities Exchange Act of 1934 requires a consolidated display of the last sale transaction reports and quotations from market centers.
Please click http://www.sec.gov/news/press/2001-93.txt for a copy of the SEC news release announcing the issuance of the market information report.
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INVESTMENT MANAGEMENT DIRECTOR REVIEWS ADVISER REGULATORY DEVELOPMENTS
9.10.2001 In a speech at the National Symposium on Investment Adviser Regulation in Philadelphia, Paul Roye, the Director of the SEC's Division of Investment Management, reviewed a number of recent SEC actions and other developments related to investment advisers. Among the topics he discussed were:
- the success of the IARD Filing System, as well as its next phase which will require investment adviser representatives to register their state licenses over the IARD system;
- an update on the SEC's proposed brochure and brochure supplement disclosure rules;
- the SEC's recent statement that the Division of Investment Management would not regulate folios; and
- the importance of best execution.
Please click http://www.sec.gov/news/speech/spch512.htm to access a copy of Mr. Roye's speech.
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SENATE BANKING COMMITTEE OBJECTIVES ANNOUNCED
9.4.2001 Senator Phil Gramm, the ranking minority member of the Senate Banking Committee, announced the Committee's objectives for the upcoming year. They include:
- finish the securities fee reduction bill;
- repeal the Public Utility Holding Company Act; and
- cooperate with SEC Chairman Harvey Pitt's proposal to revamp and update the federal securities laws.
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