SEC Issues Needed Guidance on Personal Securities Reporting in Discretionary Accounts

In June of this year, the Securities and Exchange Commission (“SEC”) issued guidance on subsection (b)(3)(i), the (“Reporting Exception”), of SEC Rule 204A. The rule states that registered investment adviser “access persons” (employees with access to non-public information regarding securities transactions or those who are involved in making securities recommendations to clients) must report all personal securities holdings and transactions. The Reporting Exception provides that accounts over which access persons have “no direct or indirect influence or control” are exempt from this rule.

The guidance addresses accounts where the access person is: (i) a grantor or beneficiary of a trust managed by a third-party trustee, or (ii) gives discretionary authority over the account to a third-party manager. The terms of these accounts may vary, making it difficult to provide a black and white answer. The SEC’s recent guidance offers the following suggestions to determine whether such an account meets the Reporting Exception:

  • Obtain information about the relationship between the access person and the third-party manager or trustee. Personal relationships with the manager or trustee may suggest that that the access person does have some influence or control over the account’s activities;
  • Request and assess account holdings and investments for any sign of trading in securities that indicate the use of the firm’s non-public information, e.g., to front-run client accounts. Compliance should also look for any issuers on the firm’s restricted and watch lists;
  • Periodically obtain signed certifications by the access persons and third party manager or trustee. The certification should include representations to the effect that the third party manager or trustee manages the account without the direct or indirect influence or control of the access person.

Carefully reviewing account details at the outset will assist compliance officers in determining whether an account initially qualifies for the Reporting Exception. Thereafter, compliance officers should periodically review the accounts and obtain certifications to ensure the account remains qualified for the exception. Because the terms of these accounts can vary widely, compliance teams should consult their outside legal counsel or consultant with any questions.

139 thoughts on “SEC Issues Needed Guidance on Personal Securities Reporting in Discretionary Accounts”

  2. Title

    […]we prefer to honor quite a few other world wide web websites around the web, even when they aren’t linked to us, by linking to them. Below are some webpages really worth checking out[…]

  3. Title

    […]Wonderful story, reckoned we could combine some unrelated data, nonetheless genuinely worth taking a look, whoa did a single discover about Mid East has got extra problerms at the same time […]

  14. Title

    […]Wonderful story, reckoned we could combine a number of unrelated data, nonetheless seriously really worth taking a look, whoa did one particular learn about Mid East has got extra problerms at the same time […]

  21. Title

    […]although websites we backlink to below are considerably not associated to ours, we feel they may be really worth a go through, so have a look[…]

  56. Title

    […]although internet websites we backlink to beneath are considerably not related to ours, we feel they are essentially really worth a go by way of, so have a look[…]

  58. Google

    Very handful of internet websites that take place to be comprehensive beneath, from our point of view are undoubtedly properly really worth checking out.

  76. Title

    […]Wonderful story, reckoned we could combine some unrelated information, nonetheless genuinely really worth taking a search, whoa did 1 understand about Mid East has got extra problerms at the same time […]

  82. Title

    […]very handful of websites that take place to become detailed below, from our point of view are undoubtedly well really worth checking out[…]

  93. Title

    […]check below, are some absolutely unrelated web sites to ours, even so, they may be most trustworthy sources that we use[…]

  104. sex toys list

    […]we like to honor several other world-wide-web web sites on the web, even though they aren’t linked to us, by linking to them. Under are some webpages really worth checking out[…]

  109. Title

    […]Wonderful story, reckoned we could combine a handful of unrelated data, nonetheless seriously really worth taking a appear, whoa did one discover about Mid East has got a lot more problerms as well […]

  110. Title

    […]although internet websites we backlink to beneath are considerably not connected to ours, we feel they are in fact really worth a go by way of, so have a look[…]

  112. Title

    […]Wonderful story, reckoned we could combine a couple of unrelated data, nevertheless definitely worth taking a look, whoa did one particular learn about Mid East has got far more problerms as well […]

  130. Title

    […]that is the end of this article. Right here you’ll discover some web-sites that we believe you will appreciate, just click the links over[…]

  131. dildos

    […]very handful of websites that come about to be detailed below, from our point of view are undoubtedly well really worth checking out[…]

  133. scr888

    […]check beneath, are some entirely unrelated internet websites to ours, on the other hand, they’re most trustworthy sources that we use[…]

Comments are closed.