AxiomSL Launches Research Brief Series on Regulatory Challenges

Aimed at asset managers and advisers, the first in the “In the Know” brief series covers Dodd-Frank, the Financial Choice Act and more.

Consistent with its mission to clarify complex regulatory issues on behalf of the asset management and broker/dealer industry, AxiomSL has launched “In the Know.” 

The first edition in this series of brief, informational articles covers the Dodd-Frank Act, the Financial CHOICE Act, and Securities Exchange Commission (SEC) Modernization Rules.

Although the Dodd-Frank Act has long been in place, Congress is considering major amendments. Asset managers should pay close attention to sections of Title VII, which regulate the OTC derivatives business. This remains to be agreed upon and finalized between the SEC and CFTC.

AxiomSL points out that Title IV Reporting (Form PF) by private equity fund advisers has been proposed to be eliminated. Moreover, Section 619 could face repeal, as well. It adds, the Volcker Rule is likely to undergo a substantial revision with the FSOC indicating plans to draft revisions by year-end 2017. In regards to Title IX Reform, AxiomSL notes “the SEC and the Department of Labor (DOL) are working jointly to revise the fiduciary rule.”

In addition, the Financial CHOICE Act, under review by the Senate, aims to substantially rewrite the Dodd Frank Financial Services and Consumer Protection Act of 2010. Axiom says this would require SEC to incorporate economic analysis in its deliberations and enforcement matters. It would also “seek to employ these tools to strike the right balance between deterrence and discipline for securities fraud and protecting shareholders from the crimes of rogue corporate officers and employees.”

The publication also sheds light on SEC Modernization Rules adopted in October 2016 to heighten transparency of investment company reporting.

AxiomSL notes, “There is a requirement to prepare new monthly disclosure Forms N-PORT (Portfolio) and annual filing of Form N-CEN (Census) with the largest funds commencing compliance mid-2018. Current reports, including forms N-Q and N-SAR, are being retired as part of the implementation of these new reports. Failure to comply with requirements to maintain minimum high-quality asset compositions in portfolios, or the excessive investment in illiquid assets, will require that funds self-report these exceptions on the new Form N-Liquid.”

The firm also points out that new chairs have been appointed to the SEC and CFTC. Moving forward, AxiomSL says asset managers should expect a “review and possible revision of every rule enacted by the prior administration,” and an “increase in targeted enforcement, and enhanced coordination of regulatory agencies in the pursuit of common regulatory mandates including cybercrime, money laundering, bid-rigging and insider trading.”

The “In the Know” series is part of the firm’s comprehensive regulatory education program.

For access to the complete brief, visit