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Dear Members and Friends, 

Before we head into the holidays, I want to share some important updates.

  1. Accredited Investor Definition:  On December 18, the SEC will hold votes on remaining Dodd-Frank implementation items, and has now included a vote on an update to the accredited investor definition, according to the Dec. 11 open meeting notice The commission added the additional votes to a previously scheduled meeting to consider the Public Company Accounting Oversight Board’s 2020 budget. At the open meeting the SEC will consider whether to release proposed rulemaking that would expand the accredited investor definition, which sets forth income and net worth requirements for investing in Regulation D private offerings. According to testimony by SEC Chairman Jay Clayton at a Senate Banking Committee hearing this Tuesday, the proposal is likely to include non-wealth-based components to the accredited investor definition: view link. The IPA will be reporting on the proposal on December 18 as soon as it is released.
  2. SEC Investment Adviser Advertising and Referral Arrangements: On November 4, 2019, the SEC proposed amendments to the rules governing investment adviser advertisements and payments to solicitors to reflect changes in technology, investor expectations and the evolution of industry practice. These rules have not been updated in a comprehensive way since their adoption in 1961 and 1979, respectively. The proposed amendments would replace the current advertising rule’s broadly drawn limitations with principles-based provisions and expand the solicitation rule to cover arrangements involving all forms of compensation, rather than only cash, subject to a new de minimis threshold. View SEC Notice/Proposal.
  3. Massachusetts Fiduciary Rule: Secretary William Galvin, Massachusetts’ Secretary of the Commonwealth, released a “formal” rule proposal amending the previously released proposal applying a fiduciary conduct standard on broker-dealers, agents, investment advisers, and investment adviser representatives. Today, a hearing on the rule proposal was noticed in the Boston Globe. The hearing will be held on January 7 at 9:30 AM and the comment period closes at 5 PM on that same day. A redline and clean version of the fiduciary rule proposal is available online: view here.
  4. SEC Rulemaking Agenda: The SEC’s fall rulemaking (short-term) agenda includes both Guide 5 and Form S-11 as well as amendments to Rule 3-05 and Rule 3-14 of S-X (financial statements of acquired business and acquired property). Guide 5 and Form S-11 had previously been on the SEC’s long-term agenda, suggesting that the SEC is now actively working on these projects. The agenda is available online: view agenda.


Anya Coverman
SVP, Government Affairs and General Counsel
Institute for Portfolio Alternatives