Updates on Regulation, Trading, and Market Reforms for the Alternative Investment Community

CategoryRegulatory

Alert to Broker-Dealers and Hedge Funds: SEC Charges Broker-Dealer with Naked Short-Selling Violations

On May 19, 2021, the Securities and Exchange Commission (“SEC”) charged a broker-dealer, BTIG, LLC (“BTIG”), with repeatedly violating the (i) order-marking and (ii) locate provisions of Regulation SHO, in connection with more than 90 sale orders from a single hedge fund customer.  Regulation SHO regulates short sales of securities and is aimed, in large part, at reducing...

New York’s Legislative Solution for LIBOR Adopted

The New York State Legislature passed a statutory solution to reduce the risks associated with the transition away from USD LIBOR.  New York Senate Bill 297B/Assembly Bill 164B (the “NY Bill”), proposed by the Alternative Reference Rates Committee (“ARRC”) and sponsored by New York Senator Kevin Thomas, was designed to solve transition issues for legacy LIBOR contracts...

“Family Office”? What’s In a Name: The Implosion Heard Around the (Financial Markets) World

What Can We Expect from the Regulators? Robin Powers, Partner, Rimon, P.C. Archegos Capital Management’s collapse last week, and the resulting losses for several global banks, has and will impact financial markets for the foreseeable future. Regulatory efforts will likely focus on the ever-expanding shadow banking sector and shed light on its transparency (or lack thereof) and the risks. Shadow...

Digital Asset Risk Alert

The SEC’s Office of Compliance Inspections and Examinations recently published a risk alert related to investment advisers managing Digital Assets for their clients, either directly or indirectly through pooled investment vehicles.  The risk alert makes it clear that digital assets create a number of unique compliance challenges that firms should consider. Based upon risks identified in...

SEC Announces Enforcement Task Force Focused on Climate and ESG Issues

On March 4, 2021, the SEC announced the creation of a Climate and ESG Task Force in the Division of Enforcement to led by Kelly L. Gibson, the Acting Deputy Director of Enforcement (the “Task Force“)  The Task Force’s purpose is to better police the market, pursue misconduct, and protect investors, according to Kelly L. Gibson. Consistent with increasing investor focus and...

New IBOR Fallbacks Take Effect for Derivatives

New fallbacks for derivatives linked to key interbank offered rates (IBORs) have come into effect ensuring a viable safety net is in place in the event an IBOR becomes permanently unavailable while firms continue to have exposure to that rate. The fallbacks, published by the International Swaps and Derivatives Association, Inc. (ISDA), will be incorporated into all new derivatives contracts that...

SEC FINALIZES AMENDMENTS TO ADVISER ADVERTISING RULES

On December 22, 2020, the SEC amended the Investment Advisers Act of 1940, as amended, with respect to advertisements and payments to solicitors by investment advisers.[1] The amendments create a single rule (the “Rule”) that supplants the existing advertising and cash solicitation rules, marking the first time in more than 40 years that the SEC has updated its rules governing adviser marketing. ...

SEC Investment Adviser Risk Alert

On November 19, 2020 the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations released a risk alert relating to deficiencies in registered investment adviser’s compliance program.  Under Rule 206(4)-7  (the “Compliance Rule”) under the Investment Advisers Act of 1940 (“Advisers Act”), it is unlawful for a registered investment adviser to...

Welcome News in Financial Circles: LIBOR Termination Extended Briefly

On November 30th, LIBOR administrator, ICE Benchmark Administration (“IBA”), announced plans to ease worries surrounding LIBOR cessation with a brief extension to June 30, 2023.  IBA’s intention is to cease publication  (i)  of 1-week and 2-month USD LIBOR at the end of 2021 and (ii) subject to compliance with applicable regulations, including as to representativeness, it does...

ISDA IBOR Fallbacks Supplement and Protocol: What You Need to Know

I.  Introduction In 2017, the UK’s Financial Conduct Authority (“FCA”) announced that it will not require the calculation and publication of interbank offered rates (“IBORS”) beyond 2021.  The absence of a guaranteed IBOR after 2021 has triggered one of the largest and intricate challenges that financial markets have confronted to date.  Trillions of dollars of derivatives contracts and many...

Updates on Regulation, Trading, and Market Reforms for the Alternative Investment Community