Investment Management in United States

Key dates

2026-11-06

The final rule was published in the Federal Register at 91 FR 69955.

2027-02-04

Amendments to Investment Company Act rule 0-10 and Advisers Act rule 0-7 become effective.

2027-02-04 Deadline

The amendments to Advisers Act rule 203-3(b) and Form ADV become effective and compliance is required.

Suggested considerations

• Compliance teams may wish to assess whether the adviser or any relevant control group will qualify as a small entity under the revised less-than-$1 billion RAUM test once the amendments become effective.
• Advisers may wish to review Form ADV Item 12 procedures, reporting logic, and filing controls so that the revised definition is applied from the February 4, 2027 compliance date.
• Advisers and fund groups may wish to map control relationships and family-of-investment-companies aggregation methodology against the amended thresholds rather than treating each legal entity independently.
• Firms may wish to confirm that internal policies do not incorrectly treat the revised RFA thresholds as changes to SEC registration, exemption, fiduciary, reporting, custody, or other substantive obligations.
• Advisers relying on or considering a continuing hardship exemption may wish to review the conforming amendments to Advisers Act rule 203-3(b) and update related filing documentation.
• Regulatory-change inventories and future rulemaking impact assessments may benefit from recording the inflation-adjustment mechanism and monitoring subsequent Commission adjustment orders.

What changed

Effective February 4, 2027, rule 0-10 will increase the threshold for a registered investment company or business development company to qualify as a small entity from $50 million to $10 billion of net assets. Asset aggregation will use the Form N-CEN concept of a family of investment companies rather than the former group of related investment companies terminology.

Key dates

2026-11-04

The SEC adopted the amendments to Rules 0-10, 0-7, 203-3 and related Form ADV provisions.

Suggested considerations

• Compliance teams may wish to reassess the firm's status under Advisers Act Rule 0-7 and Investment Company Act Rule 0-10 using current Form ADV regulatory assets under management, fund-family relationships, net assets, and control relationships.
• Advisers and fund groups should distinguish the revised Regulatory Flexibility Act small-entity classification from SEC registration thresholds, eligibility for regulatory exemptions, and other substantive compliance obligations; the amendments do not alter those requirements.
• Fund administrators and regulatory reporting teams should review family-of-investment-companies aggregation data against Form N-CEN Item B.5 and prepare to apply the revised aggregation methodology when the amendments become effective.
• Advisers that rely on or may need a continuing hardship exemption from electronic filing should review the related Rule 203-3 and Form ADV amendments and confirm procedures, systems, and filing calendars before the compliance date.
• Compliance teams may wish to monitor the Federal Register for the publication date and calculate the 90-day effective and compliance date, since the SEC release does not yet provide a calendar date for that event.
• Regulatory policy teams should consider whether the broader small-entity population changes how the SEC's future rulemakings and Regulatory Flexibility Act analyses may affect the firm's cost and burden profile, without assuming that the classification creates immediate operational relief.

What changed

Rule 0-10 increases the net-asset threshold for an investment company, including a business development company, to $10 billion from $50 million and replaces the existing related-fund aggregation approach with a reference to a family of investment companies as used in Form N-CEN Item B.5. Rule 0-7 increases the investment-adviser small-entity threshold to less than $1 billion of regulatory assets under management from $25 million, eliminates the separate investment-adviser total-assets threshold, and makes conforming changes to the control-relationship tests.

Key dates

2026-10-29

The SEC announced charges against BG Wealth Sharing Ltd and DSJ Exchange Pty Ltd and filed the related enforcement complaint in the U.S. District Court for the Northern District of California.

Suggested considerations

• Compliance teams may wish to review third-party crypto platforms, advisers, issuers, introducers, and promoters for unsupported claims that an SEC filing represents licensing, approval, endorsement, or authorization.
• Firms should consider independently verifying Form ADV, Form D, and other regulatory filings through official regulator databases and documenting the precise legal effect of each filing before relying on it in due diligence or investor communications.
• Marketing and financial-promotion controls may wish to test for claims of risk-free or guaranteed returns, extraordinary monthly performance, government approval, SEC registration, fake certificates, and statements that a Rule 506(c) filing authorizes operation of a crypto exchange.
• Firms with exposure to BG Wealth Sharing, DSJ Exchange, or associated promoters should consider escalating the relationship for legal, fraud, sanctions, counterparty, and suspicious-activity review and preserving relevant communications, transaction records, and onboarding materials.
• Investment advisers and other regulated firms may wish to assess whether referral, custody, payment, or platform relationships involving similar schemes create customer-protection, books-and-records, disclosure, or reputational risks.
• Compliance teams may wish to incorporate the related state and foreign warnings into typology monitoring, particularly indicators such as recruitment-based compensation, blocked withdrawals, advance exit or compliance fees, fake account balances, and periodic payments used to sustain investor confidence.

What changed

This is an enforcement action, not a new rule or generally applicable compliance requirement. The SEC alleges violations of the antifraud provisions of the Securities Act of 1933 and Securities Exchange Act of 1934 by both entities, and violations of Sections 204(a) and 207 of the Investment Advisers Act of 1940 by BG Wealth. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, civil penalties against both entities, and conduct-based injunctions against BG Wealth.

Key dates

2026-09-30

The SEC issued the proposed rule, Release Nos. 33-11444, 34-106534, and IC-36351; this is the underlying proposal date, not an effective date for new obligations.

2026-10-05

The proposed rule was published in the Federal Register at 91 FR 63388.

2026-10-20

The SEC published a correction replacing the DATES section and confirming the comment deadline.

2026-12-04 Deadline

Comments on the proposed rule must be received by the SEC.

Suggested considerations

• Compliance teams may wish to calendar December 4, 2026 as the deadline for submitting comments to File No. S7-2026-34 and coordinate comments across legal, fund governance, distribution, operations, and investor-relations functions.
• Affected fund sponsors should consider assessing whether monthly or otherwise revised repurchase intervals, delayed initial repurchase offers, or more frequent discretionary repurchases would better align with portfolio liquidity and investor-liquidity expectations if the proposal is adopted.
• Registered closed-end funds and BDCs considering multiple share classes should consider mapping proposed Rule 18f-3 and Rule 17d-3 conditions against existing exemptive orders, board procedures, fee arrangements, allocation methodologies, distribution agreements, and conflict controls.
• Fund boards and advisers may wish to evaluate the anticipated written multiple-share-class plan, board approval requirements, class-level expense allocation, asset-based distribution and service-fee arrangements, and related disclosure controls.
• Operations and disclosure teams should consider a gap analysis for proposed changes to Form N-2, Form N-CEN, Form N-23c-3, shareholder reports, prospectus legends, expense examples, NAV and repurchase processing, and investor communications.
• Firms should continue treating the current Investment Company Act rules and existing exemptive orders as controlling until any final rule becomes effective and applicable transition or rescission provisions are issued.

What changed

The October 20, 2026 Federal Register correction replaces the prior DATES text in the October 5 proposal and expressly states that the release was published on October 5, 2026 and that comments must be received by December 4, 2026. The underlying proposal would amend Investment Company Act Rules 23c-3, 18f-3, and 17d-3 and related forms and rules to modernize interval-fund repurchase programs, including potentially allowing a first repurchase offer to be deferred for up to two years, monthly repurchase intervals, annual discretionary repurchases, and deduction of deferred sales loads from...

Key dates

2022-05-12

The CFTC filed its complaint against Alexandre and EminiFX, alleging fraudulent solicitation, misappropriation, and operation of an unregistered commodity pool.

2026-07-01

As of July 2026, the court-appointed receiver had returned more than $98 million to over 28,000 investors.

2026-10-19

The CFTC announced that the Southern District of New York had entered orders granting summary judgment, injunctive relief, and a civil monetary penalty against Alexandre and EminiFX.

Suggested considerations

• Compliance teams may wish to inventory products, investment clubs, managed accounts, and digital-asset offerings that pool customer contributions and obtain exposure to forex, futures, options, or other commodity interests.
• Firms should consider assessing whether their activities constitute operating a commodity pool or acting as a commodity pool operator or associated person under the Commodity Exchange Act and CFTC regulations, including whether registration or an available exemption is required.
• Firms should consider validating marketing claims about returns, automated trading, proprietary technology, trading results, and risk, with particular scrutiny of unusually high or consistent returns such as weekly performance representations.
• Compliance teams may wish to test segregation, custody, reconciliation, withdrawal, and use-of-funds controls to detect commingling, personal use of customer assets, payments to earlier investors, and unexplained transfers.
• Firms should consider maintaining evidence supporting reported performance, trading activity, investor statements, and asset ownership so that customer communications can be reconciled to underlying records.
• Digital-asset businesses may wish to review whether crypto terminology or a technology-focused structure obscures activities that remain subject to commodities, anti-fraud, registration, or customer-protection requirements.
• Firms should consider escalating suspected misappropriation, fabricated performance, or unregistered commodity-pool activity through applicable internal investigation, suspicious-activity, and regulatory-reporting processes.

What changed

This is a final enforcement outcome rather than a new rule or generally applicable regulatory amendment. The Southern District of New York entered summary judgment and injunctive relief against Alexandre and EminiFX, finding that the defendants made fraudulent representations, misappropriated investor funds, and operated as an unregistered commodity pool operator, with Alexandre acting in an unregistered associated-person capacity. The judgment imposes $228,576,962 of restitution, $15,049,500 of disgorgement subject to offset by restitution payments, and a $45,148,500 civil monetary penalty.

Key dates

2026-10-09

SEC issued the proposed amendments to Investment Company Act Rule 17a-7, Release No. IC-36358, File No. S7-2026-36.

2026-10-15

Proposed rule published in the Federal Register; the 60-day public-comment period begins.

2026-12-14 Deadline

Public comments are due, calculated as 60 days after Federal Register publication.

Suggested considerations

• Compliance teams may wish to inventory current and potential cross trades by asset class and valuation level, distinguishing Level 1, Level 2, and Level 3 positions and identifying fixed-income portfolios that could become eligible.
• Advisers may wish to design a documented pre-trade best-interest process for each participating registered fund, including consideration of open-market alternatives, alternative securities, and the option not to trade.
• Funds and advisers may wish to assess pricing-source governance, including unaffiliated-source due diligence, periodic reasonableness reviews, NAV-pricing consistency, and controls preventing use of amortized-cost values.
• CCOs may wish to map quarterly review, annual back-testing, subsequent-sale analysis, escalation, and reporting responsibilities across fund and adviser compliance functions.
• Boards and counsel may wish to assess amendments to Rule 38a-1 policies, board reporting, and governance materials in light of the proposed shift away from board-adopted Rule 17a-7 procedures.
• Operations and regulatory-reporting teams may wish to map internal asset classifications to Form N-PORT Item B.12 and Form N-MFP Item A.23, including controls for the preceding-12-month activity test and reconciliation of cross-trade and total purchases and sales.
• Records-management teams may wish to evaluate systems capable of retaining trade records, CCO review materials, and board reports for six years.
• Interested parties may wish to submit comments by the Federal Register deadline, addressing the 79 specific requests for comment, including Level 3 eligibility, bid-side NAV pricing, review frequency, scaling, and public-reporting impacts.

What changed

Eligible securities would expand from generally Level 1 securities with readily available market quotations to securities valued using inputs that are observable directly or indirectly, provided Level 2 inputs are the lowest level of inputs significant to measurement; Level 3 securities would remain excluded. The proposed independent current market price would be either the value used in the fund’s next NAV calculation on the trade date or a price the adviser reasonably determines represents current market value using one or more unaffiliated pricing sources, subject to periodic review.

Key dates

2021-01-01

Approximate beginning of the alleged delayed-allocation and cherry-picking conduct.

2023-10-31

Approximate end of the alleged conduct period.

2024-11-25

The SEC filed its civil complaint against Leech concerning the alleged allocation scheme.

2025-01-21

The district court reportedly stayed the SEC civil action pending resolution of the parallel criminal prosecution.

2026-06-05

The SEC instituted settled administrative proceedings against Western Asset, imposing a $100 million penalty and establishing a Fair Fund for affected investors.

2026-10-06

The SEC reported the consent resolution and final-judgment process against Leech, including a $3 million penalty, permanent injunctions and an officer-and-director bar.

Suggested considerations

• Firms should consider reviewing whether each block or derivatives trade is assigned to intended portfolios at or near execution, with documented reasons, approvals and timestamps for any necessary delay.
• Compliance teams may wish to test whether allocation systems and workflows prevent personnel from using intraday price movements, daily settlement prices or first-day performance to select recipient accounts.
• Firms should consider surveillance comparing execution time, allocation-entry time, settlement-price availability, subsequent performance and recipient portfolio across portfolio managers and strategies.
• Compliance teams may wish to investigate statistically significant differences in allocation latency, first-day gains and losses, reallocations, exception rates and benefits received by particular portfolios, fee arrangements or clients.
• Advisers should consider reconciling written fair-allocation and reallocation procedures with actual operating practices, including practices followed by chief investment officers and other highly senior personnel.
• Firms should consider preserving allocation instructions and related communications from trading platforms, order-management systems, email, messaging tools and manual worksheets in a form suitable for supervisory review.
• Compliance teams may wish to enhance escalation procedures for delayed allocations, repeated reallocations, unexplained exceptions and material performance differences among similarly situated accounts.
• Advisers should consider reviewing client disclosures and policies describing pro rata, fair or equitable allocation methodologies against the firm’s actual allocation logic and exceptions.

What changed

This is an enforcement resolution, not a new rule or prospective compliance deadline. It reinforces that delayed post-execution allocation can create an Advisers Act antifraud and fiduciary-duty violation where the decision-maker can observe market or settlement-price information before assigning trades to client portfolios. The matter also signals that written allocation policies are insufficient if firms do not operate, test and supervise them effectively, particularly for senior investment personnel.

Key dates

2026-10-09

SEC issued the proposal to amend Investment Company Act Rule 17a-7.

Suggested considerations

• Compliance teams may wish to determine which corporate, municipal and other fixed-income holdings are currently excluded from Rule 17a-7 cross-trading because they lack a readily available market quotation under the valuation-rule framework.
• Firms should consider assessing potential execution-cost savings, liquidity benefits and conflicts risks from expanded internal crossing, using the SEC’s indication that market impact is concentrated among larger fund families and that corporate-bond cross-trading materially declined after the valuation-rule compliance date.
• Registered fund advisers may wish to review pricing governance, independent price verification, best-execution analysis, allocation controls and conflict-management procedures in anticipation of any final rule.
• Firms may wish to map the data needed for the proposed aggregated cross-trade reporting and test whether existing order-management, compliance-monitoring and regulatory-reporting systems can capture it.
• Affected firms should consider submitting comments during the 60-day period after publication of the proposal in the Federal Register, particularly on eligible security classes, pricing methodologies, reporting granularity and oversight conditions.
• Until a final rule becomes effective, firms should continue applying the existing Section 17(a), Rule 17a-7 and Rule 2a-5 requirements and should not treat the proposal as a current exemption.

What changed

The proposal would amend Rule 17a-7, the exemption from Section 17(a) for specified purchases and sales between a registered investment company and certain affiliated persons. It would generally restore eligibility for cross-trading most fixed-income securities, which became substantially unavailable after the SEC’s adoption of the Investment Company Act valuation rule in 2020, while modernizing the conditions governing pricing and oversight to reflect more verifiable and transparent market pricing.

Key dates

2021-01-01

Beginning of the alleged cherry-picking period involving delayed allocations and disproportionate assignment of first-day gains and losses.

2023-10-31

End of the alleged cherry-picking period, described by the SEC as running through October 2023.

2024-11-01

The SEC filed its prior litigated district-court complaint against Leech; the source identifies November 2024 but does not specify the filing day.

2026-06-05

The SEC settled administrative proceedings against Western Asset, imposing a $100 million penalty, censure, cease-and-desist order, and Fair Fund process.

2026-10-06

The SEC announced its motion for entry of a consent final judgment against Leech; the judgment remains subject to court approval.

Suggested considerations

• Compliance teams may wish to review whether trade timestamps, allocation timestamps, order-entry records, and market settlement-price data permit detection of allocations made after material price movements are known.
• Firms should consider testing allocation controls for fairness and consistency across strategies, accounts, clients, and affiliated portfolios, including review of first-day gains and losses and unexplained deviations among portfolio managers.
• Firms should consider validating that written allocation, reallocation, and error-correction procedures are implemented in practice, with documented approvals, exception handling, and independent oversight.
• Compliance teams may wish to assess whether portfolio-manager trading and allocation practices diverge materially from peers or from client disclosures, and whether those differences trigger escalation, surveillance, or enhanced supervision.
• Investment advisers should consider reviewing supervisory arrangements for senior investment personnel, including evidence that surveillance alerts, exception reports, and known control weaknesses are investigated and remediated.
• Firms should consider preserving records sufficient to reconstruct the timing and rationale of trade placement, allocation, reallocation, and approval decisions, and reviewing whether disclosures accurately describe fair and equitable allocation practices.
• Affected firms may wish to monitor the court’s decision on the proposed Leech judgment and the administration of Western Asset’s Fair Fund; no general compliance deadline is stated in the publication.

What changed

This publication does not establish a new generally applicable rule; it advances a case-specific consent judgment, subject to court approval, against Leech. The proposed judgment includes a $3 million penalty, a permanent injunction against violations of the federal securities-law antifraud provisions, an officer-and-director bar, and a forthcoming associational bar. The related June 5, 2026 administrative settlement against Western Asset imposed a $100 million civil penalty, censure, and cease-and-desist order, with the penalty deposited into a Fair Fund for harmed investors.

Key dates

2026-10-06

The proposed rule was published in the Federal Register at 91 FR 63676 and the comment period opened.

2026-12-07 Deadline

Comments on the proposed rule are due to the SEC.

Suggested considerations

• Compliance teams may wish to determine whether existing or proposed fund products could use the regulated-fund performance-compensation pathway and map each arrangement against the proposed 20% net-gains cap, specified-period methodology, governance requirements, and board-determination condition.
• Advisers and fund sponsors should consider inventorying current performance-fee arrangements and identifying clients who could become eligible under the proposed accredited-investor route, without treating the proposal as authority to implement changes before adoption and an applicable compliance date.
• Fund sponsors may wish to assess the operational and disclosure impact of separately reporting performance-based compensation in Forms N-1A, N-2, and N-CSR, including fee-table, prospectus, financial-reporting, and board-material changes.
• Adviser compliance programs should consider reviewing Rule 205-3 eligibility controls, investor-classification procedures, accredited-investor evidence, client look-through analysis, and controls for the related Rule 203A-3, Rule 204-3, and Form ADV amendments.
• Fund boards and advisers may wish to evaluate how performance-fee proposals would affect fiduciary-duty analysis, conflicts management, valuation, incentive alignment, investor communications, and approval documentation.
• Affected firms should consider submitting comments by December 7, 2026, particularly on the 20% cap, specified performance period, governance conditions, disclosure design, accredited-investor eligibility, and transition or compliance-period issues.

What changed

Proposed amendments to Investment Advisers Act Rule 205-3 would create an additional route for registered investment advisers to receive compensation based on capital gains or capital appreciation from registered management investment companies and business development companies, collectively referred to as regulated funds.

Key dates

2026-10-06

The proposed rule was published in the Federal Register as 91 FR 63870, covering pages 63870-64103.

2026-12-07 Deadline

Public comments must be received by the SEC on or before this date.

Suggested considerations

• Compliance teams may wish to determine whether client or fund crypto assets are currently held through arrangements that would constitute adviser or regulated-fund self-custody under the proposal, including arrangements involving service providers, private keys, wallets, or decentralized finance protocols.
• Firms should consider mapping proposed requirements for key management, joint authorization, asset segregation, safeguarding expertise, cybersecurity, incident response, annual review, internal control reporting, and client or investor account statements against existing custody, information-security, and operational-resilience controls.
• Advisers and regulated funds may wish to assess whether existing custodians, including state trust companies, could satisfy the proposed authorization, policy, audit, internal-control, and segregation conditions.
• Compliance teams should consider preparing comments for File No. S7-2026-35 by December 7, 2026, particularly on the proposed scope of self-custody, the qualified-custodian determination, treatment of airdropped crypto assets, decentralized finance activity, and the interaction with existing custody arrangements.
• Firms should assess potential changes to Form ADV, Form ADV-E, Form N-CEN, custody records, crypto-network records, audited financial statements, and accountant reports if the proposal is adopted.
• Investment advisers and regulated funds may wish to inventory tokenized private funds and tokenized regulated-fund shares in anticipation of the proposed additional Form ADV and Form N-CEN questions.
• Firms should distinguish proposal-stage planning from current legal obligations because the publication does not itself impose the proposed requirements and does not establish a final compliance date.

What changed

The proposal would add an adviser self-custody framework under proposed Advisers Act rule 223-1(b)(7), allowing an adviser to self-custody client crypto assets only in specified circumstances and subject to conditions addressing safeguarding expertise, documented safeguarding systems, key management, joint authorization, segregation, cybersecurity risk assessment, threat and vulnerability management, incident response and recovery, annual review, an internal control report, and client account statements.

Key dates

2026-09-14

EDGAR Release 26.3 was deployed. LIVE and TEST submissions became available for ANE Exception Notices, withdrawals, Form 1, and specified Form 1 variants; the revised EDGAR functionality and interfaces became operational.

2026-10-06

The final rule became effective, and incorporation by reference of the revised EDGAR Filer Manual Volume II, Version 78, into the Code of Federal Regulations was approved.

2026-12-31 Deadline

Last day on which ANE Exception Notices and withdrawals may be submitted by email.

2027-01-01 Deadline

ANE Exception Notices and withdrawals must be submitted electronically through the EDGAR online interface or by filer-constructed EDGAR submission; email submissions will no longer be accepted.

2027-03-01 Deadline

Last day on which Form 1 and specified Form 1 variants may be filed in paper.

2027-03-02 Deadline

Form 1 and specified variants must be submitted electronically through the EDGAR online interface or by filer-constructed EDGAR submission; paper filings will no longer be accepted.

Suggested considerations

• Compliance teams may wish to identify all ANE Exception Notices and withdrawals that could be submitted between January 1, 2027 and December 31, 2026, and establish procedures using the EDGAR online interface or filer-constructed submissions before the mandatory transition.
• Affected Form 1 filers may wish to obtain or validate EDGAR access, submit Form ID where required, and migrate filing procedures from paper to the EDGAR interface or filer-constructed submissions before March 2, 2027.
• Firms may wish to use the EDGAR test environment and, where applicable, the EDGAR Beta environment to test user access, filer-constructed submissions, validation, acknowledgments, and correction workflows.
• Filing teams may wish to update internal checklists and software templates for the corrected Forms 13F and 13F-CTR reference to Special Instruction 4.
• XBRL filers and filing agents may wish to replace references to the former Volume II XBRL instructions with the EDGAR XBRL Guide and confirm that current taxonomies and technical specifications are being used.
• Firms may wish to retain evidence of successful testing, accepted submissions, filing acknowledgments, and fallback procedures during the transition periods.
• Compliance teams may wish to review EDGAR access credentials, CIK status, delegated filing permissions, and responsible-person coverage for any filer converting from paper to electronic filing.

What changed

EDGAR Release 26.3 was deployed on September 14, 2026, and the SEC adopted the corresponding Filer Manual amendments as Version 78. Technical instructions for submitting XBRL documents were removed from Filer Manual Volume II and relocated to the EDGAR XBRL Guide. EDGAR submission templates for Forms 13F and 13F-CTR were corrected so that the cover-page reference points to Special Instruction 4 rather than Special Instruction 5.

Key dates

2025-01-01

Beginning of the general period identified by the SEC during which the charged entities allegedly filed Forms ADV containing material misrepresentations; the publication does not specify an exact start date.

2026-08-27

The SEC announced the charges, disclosed the requested remedies, stated that the 38 ERA filings had been removed from its website, and referenced its related investor alert.

Suggested considerations

• Compliance teams may wish to perform a documented, line-by-line validation of Form ADV Part 1 and applicable Form ADV Part 2 disclosures, including business addresses, telephone numbers, websites, ownership, control persons, regulatory status, assets, private funds, clients, and service providers.
• Firms should consider retaining contemporaneous evidence supporting material Form ADV representations, such as lease or office records, corporate and ownership documents, fund records, audited financial statements, auditor engagement evidence, and records supporting reported assets and advisory activities.
• ERA and registered adviser compliance programs may wish to establish independent verification of counterparties' SEC registration or ERA status through the Investment Adviser Public Disclosure system and should avoid treating an SEC filing, certificate, or website badge as conclusive proof of legitimacy.
• Firms that market investment advice to individuals should consider reviewing whether their regulatory status, Form ADV disclosures, and marketing materials accurately describe whether they are registered, exempt reporting, or otherwise authorized to provide services to retail investors.
• Compliance teams may wish to investigate repeated or highly similar ownership structures, numerical disclosures, addresses, telephone numbers, websites, auditor names, or filing patterns across related advisers as potential indicators of coordinated fraudulent filings.
• Firms should consider escalating unanswered SEC requests for records and preserving relevant books, records, communications, websites, and filing-support materials, because the SEC expressly relied on alleged failures to substantiate Form ADV information.
• Private fund sponsors and allocators may wish to verify that purported fund audits were performed by identifiable independent public accounting firms with appropriate federal or state registration or licensing, rather than relying solely on statements in Form ADV.
• Financial-crime and onboarding teams may wish to incorporate the SEC's PAUSE list, investor alerts, foreign-jurisdiction indicators, website authentication checks, and independent corporate-registration checks into risk-based due diligence for purported U.S. advisers.

What changed

This publication announces enforcement complaints rather than a new rule or generally applicable filing requirement. The SEC alleges violations of Section 204(a) of the Investment Advisers Act of 1940, which governs adviser records and reports including Form ADV, and Section 207, which prohibits untrue statements or omissions in applications and reports filed under the Act. The SEC seeks permanent injunctions, conduct-based injunctions preventing the defendants from filing Forms ADV as exempt reporting advisers, and civil penalties.

Key dates

2026-08-21

Proposal published in the Federal Register for public comment.

2026-10-05 Deadline

Written comments are due 45 days after Federal Register publication.

Suggested considerations

• Firms should assess each pool’s investor eligibility against the natural-person and non-natural-person requirements in proposed Regulation 4.13(a)(4), including the distinctions between qualified eligible persons and accredited investors.
• RIAs should review offering documents, subscription procedures, investor representations, and transfer controls to support the required reasonable belief at investment or conversion that all participants satisfy the applicable eligibility criteria.
• Compliance teams may wish to confirm that each relevant pool’s interests qualify for a Securities Act exemption and that U.S. marketing practices comply with the proposed restriction, including the Rule 506(c) exception.
• Eligible advisers should map Form PF obligations and determine whether existing SEC filings would satisfy the proposed condition that Form PF be filed where required.
• Firms should prepare to file or update electronic exemption notices with the NFA and maintain the proposed Regulation 4.13 annual affirmation, recordkeeping, disclosure, and statutory-disqualification representations.
• Managers operating both registered and exempt pools should assess the proposed Regulation 4.13(e)(2) communications and redemption-right requirements and identify whether any existing participants would require notice before a pool is operated as exempt.
• Small-pool operators should model eligibility using the proposed $800,000 aggregate threshold while continuing to monitor the 15-participant-per-pool limit and unchanged contribution exclusions.
• Managers relying on Staff Letter 25-50 should preserve evidence of current compliance and evaluate transition implications because the CFTC preliminarily proposes to supersede that relief if the rule is finalized.

What changed

Proposed Regulation 4.13(a)(4) would exempt an SEC-registered investment adviser from CPO registration for qualifying pools if the pool interests are exempt from Securities Act registration and are not publicly marketed in the United States, except that the marketing restriction would not apply to pools offered under SEC Rule 506(c) of Regulation D.

Key dates

2026-08-18

The SEC published the Chairman’s statement and proposed Regulation Crypto Assets, including the proposed startup exemption, fundraising exemption, and investment-contract safe harbor.

2026-03-17

The SEC issued its interpretation concerning the application of the federal securities laws to certain crypto assets and transactions, which the Chairman identifies as a basis for the proposed framework.

Suggested considerations

• Compliance teams may wish to treat the package as a proposal rather than a currently usable exemption and continue applying the existing Securities Act, Exchange Act, and applicable state-law analysis until final rules become effective.
• Potential issuers should consider mapping planned token offerings against the proposed $5 million/four-year and $75 million/12-month limits, including aggregation, timing, resale, and interaction with other registration exemptions once the proposing release is reviewed in full.
• Issuers considering the fundraising exemption should consider preparing systems for principles-based crypto disclosures, financial-condition information, audited financial statements at the applicable thresholds, and ongoing reporting.
• Legal and compliance functions may wish to assess whether existing investment-contract documentation contains essential managerial promises and whether operational evidence could support the proposed certification required for the safe harbor.
• Crypto trading venues and intermediaries should consider inventorying assets currently treated as securities or investment contracts and evaluating how a future safe-harbor determination could affect onboarding, trading permissions, disclosures, custody, surveillance, and state-law analysis.
• Firms may wish to monitor the Federal Register publication, the SEC comment period, any revisions to the proposal, and the status of the CLARITY Act, which the Chairman described as necessary for durable market-structure rules.
• Compliance teams may wish to review independent commentary emphasizing that the proposal is a major policy shift toward tailored token fundraising but that the practical scope remains uncertain until the detailed conditions, audit thresholds, eligibility criteria, and final text are settled.

What changed

The proposed rules would establish two exemptions from Securities Act of 1933 registration for qualifying crypto-asset investment contracts. The startup exemption would permit offerings of up to $5 million during a four-year period. The fundraising exemption would permit offerings of up to $75 million during each 12-month period, subject to principles-based crypto-asset disclosures, financial-condition disclosures, financial statements, ongoing reporting, and audited financial statements at specified capital-raising thresholds; the publication does not state those audit thresholds.

Key dates

2026-03-17

The SEC issued its earlier interpretation clarifying how federal securities laws apply to certain crypto assets and transactions involving crypto assets.

2026-08-18

The SEC announced the proposed Regulation Crypto Assets framework and opened the process for public comment, subject to publication of the proposing release in the Federal Register.

Suggested considerations

• Compliance teams may wish to map planned and existing token offerings against the proposed $5 million four-year and $75 million 12-month thresholds, including aggregation across related issuers, affiliates, projects and offering periods once the proposing release is reviewed.
• Issuers should consider documenting which exemption they would use, the relevant measurement period, investor eligibility and transfer restrictions, and controls intended to prevent exceeding the applicable offering cap.
• Firms should consider preparing draft principles-based narrative disclosures and, for the $75 million exemption, assessing financial-statement readiness and the systems needed for ongoing SEC reporting.
• Project sponsors may wish to inventory all essential managerial efforts represented or promised to investors and establish evidence, governance approvals and public communications supporting any future safe-harbor position based on completion or permanent cessation of those efforts.
• Exchanges, broker-dealers and trading platforms should consider assessing how the proposed safe harbor and state-law preemption could affect asset classification, listing reviews, customer disclosures, surveillance, custody and secondary-market controls.
• Industry participants may wish to review the full proposing release and consider submitting comments within 60 days after its publication in the Federal Register; the specific deadline should not be assumed until the Federal Register publication date is confirmed.
• Firms should continue treating the proposal as non-final and should not represent that an exemption, safe harbor or state-law preemption is currently available.

What changed

The proposed framework would add two exemptions from Securities Act of 1933 registration requirements for qualifying investment contracts involving crypto assets. The first would allow aggregate offerings of up to $5 million during a four-year period on a one-time basis; the second would allow offerings of up to $75 million during each 12-month period. Issuers relying on either exemption would need to make specified principles-based narrative disclosures available to investors.

Key dates

2026-08-18

CFTC announced publication of a Notice of Proposed Rulemaking concerning amendments to Part 4 CPO and CTA registration requirements.

Suggested considerations

• Compliance teams may wish to obtain and review the full Federal Register proposal, including the precise sophisticated-investor criteria, pool-level conditions, adviser eligibility requirements, proposed small-pool capital threshold, effective date, and transition provisions.
• Firms should consider mapping each existing and prospective pool against the proposed CPO exemption conditions and each advisory mandate against the proposed CTA exemption conditions, without treating the proposal as currently available relief.
• SEC-registered advisers may wish to compare the proposed exemption with their current CFTC registration status, CFTC Regulation 4.13 or 4.14 filings, Rule 4.7 reliance, and any applicable CFTC staff no-action relief.
• Small-pool operators should consider recalculating eligibility using the proposed inflation-adjusted capital-contribution threshold once the precise amount is published and assessing whether existing offering, subscription, and compliance controls would continue to demonstrate compliance.
• Affected firms may wish to assess whether to submit comments within 45 days after Federal Register publication, particularly on investor definitions, treatment of derivatives and swaps, aggregation rules, recordkeeping, reporting, and coordination with SEC adviser requirements.
• Firms relying on existing exemptions or no-action letters should continue meeting their current conditions and filing obligations unless and until a final rule or separate relief changes them.
• Legal and regulatory inventories may be updated to cross-reference CFTC Regulations 4.5, 4.7, 4.13, and 4.14, the Commodity Exchange Act, and the Investment Advisers Act of 1940.

What changed

The CFTC issued a Notice of Proposed Rulemaking proposing amendments to Part 4. The proposal would add a CPO registration exemption for certain investment advisers registered with the SEC in connection with commodity pools whose participants are limited to specified sophisticated investors and that satisfy additional conditions set out in the proposal. It would add a related CTA registration exemption. It would also increase the capital-contribution threshold applicable to the existing small commodity pool exemption under CFTC Regulation 4.13 to account for inflation.

Key dates

2026-08-14

The SEC announced the enforcement action and filed the complaint in the U.S. District Court for the Southern District of New York.

2020-12-01

Approximate beginning of the conduct period alleged by the SEC.

2025-06-30

Approximate end of the conduct period alleged by the SEC.

Suggested considerations

• Firms should consider reconciling every investor-facing statement about upfront fees, markups, commissions, carried interest, advisory fees, transaction spreads, and total acquisition cost against actual fund and affiliate-level economics.
• Compliance teams may wish to map all principal transactions and related-party transfers between advisers, sponsors, general partners, feeder funds, and portfolio-acquisition vehicles, with documented conflict reviews and valuation support.
• Firms should consider testing whether each person soliciting private-fund interests is properly registered or otherwise operating within an applicable broker-dealer exemption, and whether compensation arrangements create broker-dealer registration or supervision concerns.
• Compliance teams may wish to review cold-calling scripts, call recordings, lead-generation practices, sales-agent training, and escalation controls for high-pressure claims, guaranteed or implied returns, scarcity statements, and misleading descriptions of pre-IPO access.
• Firms should consider verifying offering exemptions, investor eligibility, registration status, subscription documentation, and disclosure delivery for each private fund and distribution channel.
• Compliance teams may wish to perform targeted surveillance of retail and retiree sales, including cancellation or cooling-off requests, unusual concentration, complaints about undisclosed fees, and differences between quoted and realized investor charges.
• Firms should consider preserving communications, transaction records, fee calculations, investor files, sales-agent compensation data, and valuation materials in anticipation of regulatory inquiries or investor claims.

What changed

This is a civil enforcement action, not a new rule or generally applicable safe harbor. The SEC alleges violations of the antifraud, securities-registration, and broker-dealer-registration provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940, together with control-person liability and aiding-and-abetting violations by Spaventa.

Key dates

2026-08-14

Effective date of FinCEN final rule "Beneficial Ownership Information Reporting Requirement Revision" (91 FR 52508; RIN 1506-AB67), permanently narrowing CTA BOI reporting to foreign reporting companies and codifying exemptions for U.S. persons and domestic reporting companies.

Suggested considerations

• Compliance teams at foreign reporting companies should review the revised 31 CFR 1010.380 definition of "reporting company" and confirm that their entity meets the narrowed criteria (foreign formation plus registration to do business in a U.S. State or Tribal jurisdiction), updating BOI reporting inventories and scoping accordingly.
• Foreign reporting companies should update BOI reporting procedures to ensure that reports capture beneficial owners who are non-U.S. persons while excluding U.S. person beneficial owners, including revising data collection forms, internal instructions, and system logic to avoid collecting or transmitting U.S. person BOI under the CTA framework.
• Firms involved in foreign pooled investment vehicles registered in the United States may wish to revise governance and reporting processes so that BOI reports for such vehicles identify only the individual exercising substantial control (or greatest authority over strategic management) who is not a U.S. person, and cease including U.S. controllers where they qualify as U.S. persons.
• Corporate secretarial and entity management functions should update CTA/BOI scoping matrices to remove domestic corporations, LLCs, and similar entities from BOI reporting obligations and to reflect that only qualifying foreign entities remain in scope, while maintaining awareness of other AML and KYC obligations that may still apply independently of the CTA.
• Onboarding and registration workflows for foreign entities should be reviewed so that BOI reporting triggers, timelines, and responsibilities are aligned with the final rule’s foreign-only scope, including any remaining deadlines tied to registration dates, and that staff understand that U.S. person company applicant information is no longer required for CTA reporting.
• Firms maintaining records of U.S. person beneficial owners and company applicants for CTA purposes may wish to reassess retention policies, ensuring that any continued collection or storage of such data is for other legal or risk-management purposes rather than CTA compliance, and that privacy notices and data minimization practices reflect the updated regulatory position.
• Compliance teams should revise CTA-related policies, procedures, and training materials to incorporate the exemptions for U.S. persons holding FinCEN IDs, clarifying that these individuals are no longer required to update or correct BOI previously provided to obtain the identifier, and documenting any residual obligations under other BSA or AML rules.
• Banks, broker-dealers, and other AML-regulated firms should consider the impact of reduced BOI availability for U.S. persons on their own customer due diligence, beneficial ownership, and risk assessment frameworks, and evaluate whether internal KYC standards or other regulatory requirements (such as customer due diligence rules) necessitate separate collection of U.S. person ownership information irrespective of FinCEN’s CTA exemptions.

What changed

The definition and scope of "reporting company" under 31 CFR 1010.380, as implemented under 31 U.S.C. 5336, are now permanently narrowed so that entities previously defined as domestic reporting companies are exempt from BOI reporting requirements, including initial, updated, and corrected BOI reports. Foreign reporting companies remain subject to BOI reporting, but the rule confirms that they are exempt from reporting beneficial ownership information for any U.S. person beneficial owners; those U.S.

Key dates

2019-11-01

Approximate start of the alleged fraudulent conduct described by the SEC

2023-06-30

Approximate end of the alleged fraudulent conduct described by the SEC

2026-08-13

SEC announced the enforcement action

Suggested considerations

• Compliance teams may wish to review whether any compensated solicitors or referral sources are engaging in broker-like activity without registration.
• Firms should consider testing whether solicitation, negotiation, and fund-collection roles could create broker-registration exposure under Exchange Act Section 15.
• Firms may wish to reassess use-of-proceeds controls and verify that investor funds are not being diverted outside disclosed purposes.
• Firms should consider enhancing monitoring for Ponzi-like payout patterns, especially where distributions appear funded by new investor money rather than operating cash flow.
• Compliance functions may wish to review marketing and fundraising materials for consistency with the firm’s actual registration status and authority.
• Firms operating in relationship-driven communities may wish to evaluate affinity-based fraud risk and strengthen independent verification of investors, counterparties, and cash flows.

What changed

This is an enforcement action, not a rulemaking or guidance release. The SEC complaint alleges that Leor Moshe solicited investments through Capital Funding ASAP LLC by claiming investor money would fund short-term business loans, while allegedly diverting more than $11 million for personal use and more than $850,000 for Ponzi-like payments to earlier investors.

Key dates

2026-08-12

SEC administrative proceeding and release for Santander Securities LLC

Suggested considerations

• Compliance teams may wish to review mutual fund share-class selection controls to confirm lower-cost alternatives are identified and used when available.
• Firms may wish to reassess whether 12b-1 fee compensation is clearly disclosed in client-facing materials and account documentation.
• Supervisory teams may wish to test whether review procedures flag cases where a cheaper share class was available but not selected.
• Firms may wish to examine whether representative compensation or revenue-sharing arrangements could bias share-class recommendations.
• Compliance functions may wish to verify that remediation processes can identify and reimburse affected clients where share-class selection increased costs.

What changed

The SEC charged Santander Securities LLC with willful violations of Advisers Act Sections 206(2) and 207 in connection with recommending mutual fund share classes that paid 12b-1 fees while lower-cost share classes were available for the same funds. The order alleges inadequate disclosure of the conflict created by the firm’s and associated persons’ receipt of 12b-1 compensation, and it describes the conduct as a breach of fiduciary duty and disclosure obligations.

Key dates

2014-01-01

Start of the relevant conduct period during which Trustcore selected and held mutual fund share classes paying 12b-1 fees where lower-cost alternatives were available

2018-03-28

End of the relevant conduct period examined in the SEC’s administrative proceeding

2019-03-11

Date of the SEC’s administrative order against Trustcore Financial Services, LLC under the Investment Advisers Act of 1940

2020-12-31

Closure date of Trustcore’s affiliated broker-dealer, TrustCore Investments, LLC, referenced as subsequent context

Suggested considerations

• Firms should consider reviewing mutual fund share class selection methodologies to confirm that, where multiple classes of the same fund are available, the process appropriately prioritizes lower-cost share classes for clients unless a documented, client-specific rationale justifies a different choice.
• Compliance teams may wish to assess whether existing Form ADV, advisory agreements, and other client-facing disclosure documents clearly describe 12b-1 fees, revenue-sharing, and other distribution or affiliate compensation, including how these payments arise from share class selection and the resulting conflicts of interest.
• Advisory firms should consider mapping and documenting all compensation flows between the adviser, affiliated broker-dealers, and associated persons that are tied to mutual fund holdings, including 12b-1 fees and other distribution-related payments, to support clear conflict identification and disclosure.
• Firms may wish to evaluate supervisory controls and surveillance around mutual fund share class usage, including periodic reviews or exception reports designed to detect legacy, higher-cost, or revenue-generating share classes that remain in client accounts where lower-cost alternatives exist.
• Compliance teams should consider testing whether advisory personnel understand the firm’s fiduciary obligations under the Advisers Act in the context of fee-driven product selection, and whether training materials adequately cover share class conflicts and disclosure expectations.
• Advisory firms may wish to implement or enhance procedures requiring documentation of the rationale for any recommendation or retention of mutual fund share classes that pay 12b-1 fees or other distribution fees, especially where cheaper classes of the same fund are available to the client.
• Firms should consider reviewing and, where needed, updating policies governing interactions between advisory and brokerage affiliates, to ensure that incentives tied to fund distribution or 12b-1 fees do not undermine client best interest or the adviser’s fiduciary duty.
• Compliance teams may wish to benchmark their practices against prior SEC share class selection initiatives and enforcement matters, using this order as an example of the types of conflicts, disclosure gaps, and remedial undertakings the SEC is prepared to pursue.

What changed

This publication does not introduce new rules but memorializes a final SEC enforcement action and related undertakings under the Investment Advisers Act of 1940. The SEC imposed a formal cease-and-desist order against Trustcore Financial Services, LLC for violations of Section 206(2) (fraudulent conduct by an investment adviser) and Section 207 (untrue statements or omissions of material fact in filings with the SEC), in connection with the adviser’s selection and retention of mutual fund share classes that paid 12b-1 fees where lower-cost share classes were available.

Key dates

2017-06-01

Beginning of the conduct period identified by the SEC for the undisclosed or inadequately disclosed rollover and referral incentive-compensation practices.

2022-02-01

End of the conduct period identified by the SEC for the disclosure and policies-and-procedures failures.

2025-01-17

The SEC issued the settled administrative order against Transamerica Financial Advisors, LLC.

Suggested considerations

• Compliance teams may wish to compare conflict disclosures against actual compensation practices to confirm that conditional language does not understate incentives that are being paid in practice.
• Firms may wish to review rollover-related compensation arrangements for specificity in Form ADV brochures, client agreements, training materials, and sales communications.
• Compliance teams may wish to test whether policies and procedures under Rule 206(4)-7 are designed to identify, monitor, and remediate gaps between business practices and client disclosures.
• Firms should consider whether representative-level incentive compensation tied to referrals or rollovers warrants heightened supervision, approval workflows, or additional conflict controls.
• Firms may wish to assess whether retirement rollover supervision includes review of disclosure consistency, repapering, and cross-functional sign-off when compensation structures change.

What changed

This is an enforcement action, not a new rule or interpretive release, so it does not amend the underlying regulatory text. The SEC found violations of Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 because the firm allegedly paid incentive compensation to investment adviser representatives for referrals and retirement rollovers from at least 2017-06-01 through 2022-02-01, while earlier disclosures used language suggesting the firm merely 'may' provide incentives.

Key dates

2021-07-09

SEC announced settled administrative proceedings against Kestra Advisory Services, LLC and Kestra Private Wealth Services, LLC

2026-08-12

SEC administrative proceedings index and SEC newsroom list the Kestra Private Wealth Services matter under Release No. 34-106110

Suggested considerations

• Compliance teams may wish to review whether disclosures about affiliated compensation, markups, and related conflicts are specific and prominent enough for advisory clients.
• Firms should consider testing mutual fund trade processing and fee assessment workflows for undisclosed economic benefits to affiliates.
• Dual registrants may wish to assess whether advisory and broker-dealer compliance functions are coordinated so disclosures, operations, and compensation schedules are aligned.
• Firms may wish to examine whether written policies and procedures are detailed enough to detect and prevent conflicts tied to transaction fees and non-transaction service fees.
• Wealth management firms may wish to compare client-facing disclosures against internal agreements and operational fee flows to identify inconsistencies.
• Compliance teams may wish to consider periodic testing of conflict disclosures and fee practices to determine whether similar issues would be identified before an exam or enforcement review.

What changed

This is an enforcement order, not a rulemaking, so it does not create new requirements. It nonetheless reinforces that investment advisers must provide full and fair disclosure of conflicts created when an affiliated broker-dealer receives compensation from mutual fund trades and related services, including situations described by the SEC as fee markups. The order also underscores the need for written compliance policies and procedures reasonably designed to prevent violations, which the SEC tied to Rule 206(4)-7.

Suggested considerations

• Compliance teams may wish to review whether advertising approval workflows are designed to identify statements that could be materially false or misleading under Advisers Act standards.
• Firms may wish to verify that marketing claims are supported by current documentation before use, especially where claims relate to qualifications, capabilities, or other material attributes.
• Teams may wish to confirm that all promotional channels, including websites, PDFs, presentations, email campaigns, and social media, are included in supervisory review.
• Firms may wish to assess whether recordkeeping processes preserve final and pre-approved versions of advertisements and the support for material claims.
• Compliance teams may wish to consider whether training for marketing and advisory personnel clearly addresses the prohibition on untrue statements of material fact in advertisements.

What changed

This publication is an enforcement order, not a new rulemaking, so it does not create new generally applicable obligations. It applies existing Investment Advisers Act advertising standards by finding that the firm violated Section 206(4) and Rule 206(4)-1(a)(5) through advertisements containing untrue statements of material fact. The order also requires a cease-and-desist remedy and imposes a $200,000 civil money penalty, payable within 10 days of the order’s entry.

Key dates

2019-08-01

SEC civil action filed in the District of Massachusetts

2024-03-29

District court entered final judgment against Commonwealth

2024-04-01

Whistleblower notice lists the qualifying judgment/order date

2024-07-05

Whistleblower notice last reviewed or updated

Suggested considerations

• Compliance teams may wish to review whether Form ADV and client-facing disclosures describe revenue-sharing arrangements with enough specificity to explain the actual conflict and the related economic incentive.
• Firms may wish to assess whether disclosures address not only the existence of revenue sharing, but also whether it may steer recommendations toward higher-cost mutual fund share classes over cheaper alternatives.
• Firms may wish to test whether policies and procedures under Rule 206(4)-7 expressly cover identification, escalation, review, and disclosure of revenue-sharing conflicts.
• CCOs may wish to confirm that they are being kept fully informed of revenue-sharing arrangements and related conflicts, especially where those arrangements can affect product recommendations or supervision.
• Compliance functions may wish to evaluate whether representatives understand the structure of revenue-sharing payments and how those economics may influence client recommendations.
• Dual registrants may wish to align broker-dealer and advisory disclosures so that the conflict is not described in one channel while omitted or softened in another.

What changed

This was an enforcement action, not a rulemaking, so it did not create new industry-wide requirements. The SEC alleged violations of Section 206(2), Section 206(4), and Rule 206(4)-7 of the Investment Advisers Act based on inadequate disclosure of material conflicts of interest and failure to adopt and implement adequate compliance policies and procedures.

Key dates

2021-07-09

SEC announced and settled the Kestra Advisory Services administrative proceeding

2021-07-09 Deadline

Order required payment of disgorgement, prejudgment interest, and civil penalty within ten days of entry of the order

Suggested considerations

• Compliance teams may wish to review whether client disclosures describe all forms of affiliated compensation, revenue sharing, and other economic benefits that could influence recommendations.
• Firms should consider whether Form ADV narratives, client agreements, and supervisory documentation are consistent on affiliate compensation and conflict disclosure.
• Dual registrants may wish to map advisory and brokerage compensation streams in their conflict inventories to confirm that material conflicts are captured and escalated.
• Firms should consider whether written compliance policies and procedures are tailored to actual business practices, rather than existing only in generic form.
• Compliance functions may wish to test whether supervisory reviews can detect compensation arrangements that create disclosure obligations under the Advisers Act.
• Wealth management organizations may wish to assess training for advisers and supervisors on when affiliate compensation and shared revenue arrangements must be disclosed to clients.

What changed

This was not a new rulemaking; it was an SEC enforcement order applying existing requirements under Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7. The Commission found that Kestra AS failed to disclose two types of compensation received by its affiliated broker-dealer and predecessor firm, including compensation tied to conflicts of interest, and that clients therefore lacked material information needed to assess those conflicts.

Suggested considerations

• Compliance teams may wish to review mutual fund share class selection logic to confirm whether lower-cost eligible share classes were available and used where appropriate.
• Firms should consider whether 12b-1 fee revenue is fully identified in conflict inventories and disclosed clearly in Form ADV and related client materials.
• Advisory supervision may wish to test whether recommendations are consistent with a client-first or best-interest framework when fund share class options differ in cost.
• Firms may wish to evaluate whether exception handling for higher-cost share class usage is documented, approved, and supported by a client-specific rationale.
• Compliance functions may wish to assess whether remediation and restitution calculations are available if historical share class selection issues are identified.

What changed

This was not a new rulemaking or interpretive release; it was an SEC administrative enforcement action based on alleged breaches of fiduciary duty and inadequate disclosure tied to mutual fund share class selection and 12b-1 fee revenue. The SEC’s order indicates the firm recommended, purchased, or held higher-cost share classes for clients despite lower-cost alternatives being available, and the firm received compensation through 12b-1 fees that created a conflict.

Key dates

2014-01-01

Start of relevant conduct period during which Investacorp Advisory Services, Inc. recommended or retained mutual fund share classes with 12b-1 fees despite lower-cost alternatives being available

2018-03-30

End of relevant conduct period covered by the SEC administrative order against Investacorp Advisory Services, Inc.

2026-08-12

SEC issues administrative order in Release No. 34-106089, File No. 3-19037, imposing cease-and-desist relief, censure, disgorgement, and prejudgment interest on Investacorp Advisory Services, Inc.

Suggested considerations

• Firms should consider reviewing mutual fund share-class selection policies and procedures to confirm that, where clients are eligible, the lowest-cost available share class of a given fund is systematically considered and documented, particularly in accounts where the firm or an affiliate receives 12b-1 fees.
• Compliance teams may wish to evaluate Form ADV Part 2A, advisory brochures, and other client disclosures to determine whether receipt of 12b-1 fees and similar distribution or servicing compensation is clearly described as a material conflict of interest, including the incentives it creates for advisers and affiliated broker-dealers.
• Advisory firms with affiliated broker-dealers should consider mapping compensation flows, including 12b-1 fees and revenue sharing, between entities to identify where those arrangements could reasonably influence share-class recommendations, and whether enhanced disclosure or conflict-mitigation controls are warranted.
• Firms may wish to implement or refine surveillance and testing to identify accounts invested in higher-cost mutual fund share classes when a lower-cost share class of the same fund appears available to that client, and to assess whether any such positions reflect policy exceptions or potential remediation candidates.
• Investment committees and disclosure governance bodies should consider comparing actual fund-share-class usage patterns against stated policies and disclosures in advisory brochures, wrap-fee program documents, and client agreements to confirm alignment and identify gaps in describing conflicts tied to 12b-1 fee receipt.
• Firms that historically received 12b-1 fees or similar fund distribution compensation during periods comparable to 2014–2018 may wish to consider whether a retroactive review of share-class selection and client eligibility is appropriate and whether any client reimbursement, remediation, or supplemental disclosure exercises are advisable in light of the SEC’s enforcement posture.
• Compliance and supervisory functions should consider updating training for investment adviser representatives and registered representatives to ensure they understand how mutual fund share-class selection, 12b-1 fee arrangements, and affiliated broker-dealer compensation can create fiduciary and disclosure risk under the Advisers Act.
• Legal and compliance teams may wish to revisit enterprise-level conflicts of interest inventories to ensure that mutual fund share-class selection practices, 12b-1 fee arrangements, and related revenue-sharing structures are explicitly captured, assessed, and tied to appropriate controls and disclosures.

What changed

The publication does not introduce new rules or amend existing regulations; it is an enforcement settlement applying existing fiduciary and disclosure obligations under the Investment Advisers Act of 1940, including Sections 203(e) and 203(k). The order confirms that the SEC considers the practice of placing advisory clients into mutual fund share classes that charge 12b-1 fees when lower-cost, non-12b-1 share classes of the same fund are available to be a material conflict of interest when the adviser or an affiliated broker-dealer receives those fees.

Key dates

2026-08-12

SEC administrative-proceedings listing date for the AXA Advisors matter

Suggested considerations

• Compliance teams may wish to review whether mutual fund share class selection processes systematically identify the lowest-cost eligible class for each account type and client segment.
• Firms may wish to assess whether disclosures in Form ADV, client agreements, and supervisory materials clearly describe 12b-1 compensation and other share-class conflicts.
• Supervisory teams may wish to confirm that representatives’ incentives tied to 12b-1 revenue are identified, reviewed, and mitigated or disclosed where necessary.
• Firms may wish to document a defensible comparison process for share classes and retain evidence supporting the selected class for each recommendation.
• Compliance functions may wish to evaluate whether prior-client remediation procedures are calibrated for situations where clients were placed in more expensive share classes than necessary.

What changed

This publication is an enforcement order, not a rulemaking or policy statement. The order requires AXA Advisors to cease and desist from future violations of Sections 206(2) and 207 of the Advisers Act, is accompanied by a censure, and imposes monetary relief totaling $1,134,152, consisting of $972,007.36 in disgorgement and $162,144.64 in prejudgment interest. The order also directs payment to affected investors, reflecting the SEC’s view that inadequate share-class selection and conflict disclosure can require remediation.

Key dates

May 2026

– Timothy Zimmerman joins the SEC’s Division of Enforcement as a senior advisor to the Director, establishing the leadership base for the new unit

05 August 2026

– The SEC publicly announces the establishment of the Financial Reporting and Accounting Unit in the Division of Enforcement

Suggested considerations

• Conduct a targeted risk assessment of financial reporting and accounting controls, focusing on areas historically associated with SEC enforcement (e.g., revenue recognition, reserves, impairments, valuations, related-party transactions, and non-GAAP measures).
• Review and, where necessary, enhance internal controls over financial reporting (ICFR) and disclosure controls and procedures to ensure that material accounting judgments are robustly documented, reviewed, and escalated.
• Strengthen audit committee oversight of financial reporting and external audit, including regular discussions of SEC enforcement trends, known accounting risk areas, and the adequacy of management’s remediation of control deficiencies.
• Ensure that documentation of significant accounting judgments and estimates (including communications with external auditors) is complete, contemporaneous, and capable of withstanding regulatory scrutiny.
• Review external auditor engagement terms and governance, including partner rotation, independence safeguards, and responses to audit findings, to mitigate enforcement risk relating to audit quality and auditor misconduct.

What changed

• - The SEC has created a new Financial Reporting and Accounting Unit within the Division of Enforcement focused on accounting and financial reporting fraud and broader accounting and auditing...
• The new unit reflects an expanded enforcement capacity and prioritization for matters involving issuer financial statements, accounting judgments, internal controls, audit quality, and related...
• The unit will use a specialized staffing model, combining attorneys and accountants with technical skills in financial reporting, accounting, and auditing in the securities regulation context.
• The unit is expected to operate with enhanced cross-division coordination, working closely with staff across relevant SEC divisions and offices to ensure enforcement outcomes align with broader...
• The publication is an organizational/enforcement announcement, not a rulemaking, and does not introduce new disclosure requirements, filing obligations, or changes to accounting standards.

Key dates

16 March 2026

- Judge Margaret A. Ryan’s resignation as Director of the Division of Enforcement becomes effective, and Principal Deputy Director Sam Waldon is named Acting Director of Enforcement

Early April 2026

- David Woodcock is named permanent Director of the Division of Enforcement, succeeding Judge Ryan

31 July 2026

- Principal Deputy Director of Enforcement Sam Waldon departs the SEC after more than 14 years at the agency; his successor assumes the role of Principal Deputy Director

Suggested considerations

• Review and update enforcement‑risk assessments to reflect the forthcoming change in SEC Enforcement Division Principal Deputy Director, with particular focus on core fraud, insider trading, and accounting‑related risks.
• Re‑evaluate internal investigation, Wells process, and SEC engagement protocols to ensure they align with current Enforcement Manual practices and anticipate any refinements under the new Principal Deputy Director.
• Brief senior management, boards, and audit committees on the SEC enforcement leadership transition and its implications for prioritization of accounting, disclosure, and gatekeeper cases, particularly in light of the SOX‑focused enforcement unit.
• Reassess crypto and digital asset exposure, including ongoing or threatened SEC matters, to account for potential shifts in enforcement posture under new leadership while maintaining preparedness for fraud‑focused actions involving retail investors.
• Reinforce insider trading surveillance, market‑abuse monitoring, and controls around material non‑public information, reflecting the Enforcement Division’s continued emphasis on traditional trading‑related misconduct.

What changed

• - The SEC has formally announced that Principal Deputy Director of the Division of Enforcement Sam Waldon will leave the agency effective 31 July 2026, ending more than 14 years of service at the SEC.
• The Enforcement Division will have a new Principal Deputy Director (named in the release), who will assume responsibility for overseeing day‑to‑day enforcement operations, supervision of regional and...
• Waldon’s departure follows his recent tenure as Acting Director and Principal Deputy Director during a period of strategic restructuring of the Enforcement Division, including creation of multiple...
• The transition occurs against the backdrop of earlier Commission decisions to rescind delegation of formal order authority to the Enforcement Director, returning formal order approvals to the...
• Under Waldon’s leadership, the Division emphasized “quality over quantity” cases, focusing on traditional “core” areas (insider trading, accounting and disclosure fraud, market manipulation,...

Key dates

2026-07-21

SEC proposed Regulation E-Delivery and published the proposal in the Federal Register

2026-09-21 Deadline

Comment period closes

Suggested considerations

• Compliance teams may wish to inventory all information currently delivered under an opt-in electronic delivery framework and map it to the proposed covered information categories.
• Firms may wish to assess whether their current customer or client communications systems can support a direct-delivery model and a statement-of-availability model, including website hosting and link accuracy controls.
• Operational teams may wish to review whether they can generate and track the proposed transition notices for recipients currently receiving paper delivery.
• Firms may wish to evaluate how they will handle paper-copy requests, opt-outs, and updates to electronic address records if the proposal is adopted.
• Proxy and fund operations teams may wish to identify rule-specific processes that would need revision if Rule 30e-3 is rescinded and the proxy/tender offer amendments are finalized.
• Compliance teams may wish to prepare comment letters focused on definitions, PFI handling, remediation obligations, and the transition process before the comment deadline.

What changed

The proposal would create a new Part 303 in the SEC rules for “Regulation E-Delivery: Delivering Covered Information Through Electronic Delivery.” It would define key concepts such as electronic delivery, electronic address, covered entity, covered information, and covered recipient, and would set conditions for when information may be delivered directly electronically versus when a statement of availability must be used.

Key dates

2026-07-16

SEC proposed Regulation E-Delivery

2026-09-21 Deadline

Public comments due on the proposal

Suggested considerations

• Compliance teams may wish to map all current delivery obligations to determine which documents would qualify as 'covered information' under the proposal.
• Firms may wish to review whether their records reliably capture valid electronic addresses for intended recipients.
• Firms may wish to assess how they would evidence the required prominent disclosure and opt-out status before relying on electronic delivery.
• Firms may wish to identify communications containing personal financial information and evaluate whether those items would need a statement-of-availability approach rather than direct electronic delivery.
• Firms may wish to plan for paper-notice and transition workflows for recipients currently receiving paper delivery.
• Firms may wish to review affected proxy, tender offer, fund reporting, Form CRS, and Form ADV processes for operational and disclosure changes if the proposal is finalized.

What changed

The proposal would create a new, cross-cutting framework under the federal securities laws for electronic delivery of 'covered information' by 'covered entities.' Under the proposal, electronic delivery could satisfy delivery obligations without prior affirmative consent if the recipient has provided an electronic address, has received prominent disclosure that information will be sent electronically, and has not opted out.

Key dates

2026-07-16

SEC issued the proposal for Regulation E-Delivery

2026-07-21

Federal Register publication date for the proposing release

2026-09-21 Deadline

Deadline for public comments on the proposal

Suggested considerations

• Compliance teams may wish to map which current disclosures could move to electronic delivery under the proposed framework.
• Firms may wish to assess whether their client and investor records reliably capture valid electronic addresses and opt-out status.
• Operations teams may wish to review how to generate the two required paper transition notices for recipients currently in paper delivery.
• Firms may wish to evaluate whether existing website, authentication, and delivery controls could support the proposed delivery methods, especially for materials containing personal financial information.
• Regulatory teams may wish to prepare comment letters before the SEC’s comment deadline.
• Firms may wish to inventory downstream rule changes needed if the SEC finalizes conforming amendments to proxy and tender-offer delivery rules.

What changed

The proposal would create a new Regulation E-Delivery framework under which covered entities could deliver covered information electronically without first obtaining affirmative consent, provided specified conditions are met. The SEC says the rule would apply broadly across federal securities laws and cover issuers, broker-dealers, investment advisers, and others, including materials such as prospectuses, fund annual and semi-annual shareholder reports, proxy statements, trade confirmations, Form CRS disclosures, and Form ADV Part 2 brochures.

Key dates

TBD (upon Federal Register publication)

– Start of the 60‑day public comment period on the Regulation E‑Delivery proposal

TBD Deadline

– End of the 60‑day comment period; market participants must have submitted feedback on scope, conditions, investor protections and operational impacts by this date

TBD (post‑adoption) Deadline

– Effective date of final Regulation E‑Delivery, after which firms may begin relying on the rule for default e‑delivery, subject to any specified compliance or phase‑in dates in the adopting release

TBD (post‑effective date) Deadline

– Commencement of required transition processes, including the mailing of two paper notices and implementation of opt‑out mechanisms, for investors currently receiving paper communications

Suggested considerations

• Conduct a comprehensive mapping of all documents currently delivered under federal securities law requirements (prospectuses, shareholder reports, proxy materials, trade confirmations, Form CRS, Form ADV brochures) and determine how each will be delivered under Regulation E‑Delivery.
• Review and update disclosure, investor communication and delivery policies to incorporate e‑delivery as the default method while clearly documenting investor rights to request and receive paper delivery at any time.
• Design and implement procedures for maintaining accurate electronic contact information for investors and clients, including periodic verification processes and remediation steps for undeliverable emails or failed electronic transmissions.
• Develop and operationalize the transition process for paper‑based recipients, including generation and mailing of the two required paper notices that explain the move to e‑delivery and the opt‑out option.
• Update client and investor onboarding materials, account agreements and preference‑capture workflows to reflect the new default e‑delivery model and how investors can elect paper delivery or change their preferences.

What changed

• - Regulation E‑Delivery would formally replace the SEC’s decades‑old, purely guidance‑based approach to electronic delivery and establish a rule‑based framework that expressly permits e‑delivery to...
• Electronic delivery would become the default method of delivery, meaning firms could deliver required regulatory information electronically without first obtaining the investor’s affirmative consent,...
• The rule would preserve investor choice by requiring that investors and other recipients be able to request paper delivery at any time and continue receiving paper format upon request.
• The proposal would set out requirements and conditions for when e‑delivery is deemed compliant, including use of electronic addresses or other electronic methods reasonably designed to ensure receipt...
• The range of deliverable documents under Regulation E‑Delivery would be broad, covering prospectuses for funds and other issuers, fund annual and semi‑annual shareholder reports, proxy statements,...

Key dates

20 March 2023

- SEC Office of Municipal Securities updates the Registration of Municipal Advisors FAQs to add guidance on completion and timelines for Form MA, Form MA‑I, and Form MA‑NR, setting baseline expectations for registration filings and updates

22 January 2025

- SEC updates the Registration of Municipal Advisors FAQs to provide additional staff views for public finance market participants on when their activities require municipal advisor registration

10 July 2026

- SEC Office of Municipal Securities issues the latest update to the Registration of Municipal Advisors FAQs, adding clarifications for P3 participants, remote work office disclosures on Forms MA/MA‑I, recordkeeping scope for pricing advice, and a new FAQ on how to register as a municipal advisor

Suggested considerations

• Conduct a comprehensive assessment of public‑private partnership activities to determine whether any structuring, advisory, or financing work for state or local governments involves “municipal advisory activities” that trigger SEC municipal advisor registration requirements.
• Review all current and planned municipal advisory activities (including indirect advice through third‑party professionals) against the SEC’s municipal advisor definition, exclusions, and exemptions, and document registration determinations in a formal internal memo.
• Identify all locations, including employees’ remote and home offices, where municipal advisor‑related business is conducted, and update Form MA and Form MA‑I filings to ensure accurate disclosure of “offices” according to the new FAQ guidance.
• Review and, where necessary, update books‑and‑records policies and procedures to ensure that advice on pricing of new issues of municipal securities is fully captured, including communications, analyses, models, and recommendations, in line with SEC and MSRB recordkeeping standards.
• Establish or update onboarding and change‑management controls to ensure that new municipal advisory lines of business, new P3 mandates, or expansions into remote work arrangements are reviewed by compliance for municipal advisor registration and office‑reporting implications before launch.

What changed

• - The FAQs now provide targeted guidance for public‑private partnership (P3) market participants on when their activities in structuring or advising on P3 financings constitute municipal advisory...
• The FAQs clarify for Form MA and Form MA‑I filers which remote work locations where municipal advisor‑related business is conducted must be disclosed as an “office,” affecting how firms classify and...
• The FAQs add staff views on the scope of recordkeeping requirements when a municipal advisor provides advice on the pricing of a new issue of municipal securities, reinforcing obligations under...
• A new FAQ explains how to register as a municipal advisor, directing prospective advisors (including sole proprietors) to an existing SEC staff Informational Bulletin and MSRB compliance resource...
• The SEC reiterates that the final municipal advisor registration rules adopted in 2013 remain in force and emphasizes that firms and individuals conducting municipal advisory activity should “come...

Key dates

2026 (TBD)

- The Retail Fraud Working Group begins operating as an internal enforcement priority; the announcement does not specify a formal launch date or implementation timetable

13 May 2026

- SEC Enforcement Director David Woodcock publicly stated that the Retail Fraud Working Group would be reinstituted and that it would focus on protecting retail investors and strengthening coordination with state and federal partners

Suggested considerations

• Review retail-facing sales, disclosure, and supervision controls for gaps that could create exposure under SEC fraud theories.
• Reassess product approval, marketing review, and suitability procedures for offerings sold to individual investors.
• Test whether financial reporting, performance, and valuation disclosures could be challenged as misleading or incomplete.
• Strengthen surveillance for insider trading, market manipulation, and suspicious transaction patterns involving retail accounts.
• Reevaluate client-asset safeguarding, custody, and trade-allocation controls to prevent misuse or misappropriation.

What changed

• - The SEC is reinstating the Retail Fraud Working Group within the Division of Enforcement to concentrate resources on identifying and pursuing misconduct that disproportionately harms retail...
• The Working Group will support stronger coordination with state and federal enforcement partners, including improved information-sharing and joint efforts.
• The SEC’s enforcement priorities now explicitly include offering fraud, accounting and disclosure fraud, insider trading, market manipulation, fraud by foreign actors, and fiduciary breaches...
• The SEC is signaling that it will distinguish between honest mistakes and actual fraud, but will still assess whether errors caused investor harm and calibrate remedies accordingly.
• The initiative reinforces the SEC’s broader retail-investor focus, building on the earlier Retail Strategy Task Force and related retail-protection efforts.

Key dates

2026-06-25

The joint final rule was issued and published in the Federal Register as 91 FR 38246.

2026-10-01

The joint final rule becomes effective. Its standards become available for consideration in later agency-specific reporting requirements, but existing reporting requirements do not change solely because of this effective date.