Compliance April 30, 2015

SEC Schedules Compliance Seminars

The Securities and Exchange Commission (SEC) released its schedule of Compliance Outreach Program seminars, given regionally in six cities this year.
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The events are well worth attending for anyone concerned about examinations or investigations. The SEC says in a statement that the events are a chance for the commission’s staff to share information about risks, priorities and deficiencies they’ve observed in previous examinations. They discuss with attendees how senior executives and compliance professionals have addressed these matters.

The 2015 regional seminars will include an overview of the SEC’s National Examination Program as well as a discussion of current topics of particular interest for the Division of Investment Management and the Enforcement Division’s Asset Management Unit. The seminars also feature the following panels on current hot-button topics in investment management regulation.

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Miami: Key examination program initiatives, registrant responsibilities for broker/dealers that migrate to the investment adviser business model, staff examinations and observations regarding cybersecurity, and examination and compliance issues that may result in enforcement referrals. Wednesday, June 10, 9:15 a.m. to 1 p.m. Register for this event here.

New York: Staff examinations and observations regarding cybersecurity and those relevant to advisers to private funds, such as fees and expenses. Register for this event here.

Staff examinations and observations regarding cybersecurity, issues applicable to dual registrants or advisers with affiliated broker/dealers, the National Examination Program’s retirement initiative, and investment company issues. Register for this event here. Both seminars take place Thursday, June 18, 12:30 p.m. to 4:30 p.m.

Chicago: Key examination program initiatives, examination selection process, and issues affecting alternative funds and private funds. Immediately following the seminar, the staff will host a forum for smaller investment advisers. Monday, June 29, 8:45 a.m. to 1:15 p.m. Register for this event here.

Denver: Staff examinations and observations regarding custody issues and those relevant to advisers to private funds. Immediately following the seminar, the staff will host a forum for smaller investment advisers. Tuesday, July 14, 8:30 a.m. to 1 p.m. Register for this event here.

Philadelphia: Key examination program initiatives, examination selection process, and issues relevant to private fund advisers including fees and expenses, disclosures, valuation, custody, and conflicts of interest. Tuesday, July 14, 8:30 a.m. to 1 p.m. Register for this event here.

Los Angeles: Discussion of the National Examination Program’s retirement initiative. This seminar will also have two concurrent breakout sessions, one for issues applicable to dual registrants or advisers with affiliated broker-dealers and one for staff examinations and observations relevant to advisers to private funds. Friday, September 11, 8:45 a.m. to  1:45 p.m. Register for this event here.

The seminars are sponsored by the SEC’s Office of Compliance Inspections and Examinations, the Division of Investment Management, and Division of Enforcement’s Asset Management Unit.

Registration for the events will be closed approximately one week before the date of the event.  Seating is limited, and the events will not be webcast. If registrations exceed capacity at an event location, investment company and investment adviser chief compliance officers will be given priority on a first-come, first-registered basis. The SEC recommends arriving early because of security. For more information contact: ComplianceOutreach@sec.gov.

Compliance April 30, 2015

ESOP Bill Introduced in U.S. House

U.S. Representatives Dave Reichert (R-Washington) and Ron Kind (D-Wisconsin) introduced a bill to encourage the creation of S Corporation Employee Stock Ownership Plans (S ESOPs).
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The Promotion and Expansion of Private Employee Ownership Act of 2015 (H.R. 2096) includes provisions to encourage owners of S Corporations to sell their stock to an ESOP, expand financing opportunities for S Corporation ESOPs, provide technical assistance for companies that may be interested in forming an S Corporation ESOP, and ensure that small businesses that become ESOPs retain their Small Business Association certification. Similar legislation has been introduced in the past.

“This legislation is critical to giving employees ownership over their work and retirement in a time when many people are concerned about their retirement savings,” says Reichert.

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“By making it easier for companies to become employee-owned, this legislation will not only grow the number of employee owned businesses, it will provide retirement security to more Americans,” Kind adds. “Employee-owned companies perform better – not just for themselves but for every one of their employees as well.”

A recent report from Ernst & Young revealed S corporation ESOPs outperformed the S&P 500 total return index in terms of total return per participant by 62% from 2002 to 2012.  

“We need policies to encourage employee stock ownership, and the proposed policies in H.R. 2096, should address core social issues such as adequate retirement security and making sure working Americans have an ownership stake in our capitalistic system,” said ESOP Association President, J. Michael Keeling, in a statement.

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