Distribution – Page 5 – Global Investment Law Watch

United States: PCAOB’s Vacating 2021 Determination under HFCAA Lowers the Risk of Delisting

Dec 22 2022

On 15 December 2022, the Public Company Accounting Oversight Board (PCAOB) announced that it was able to secure complete access to inspect and investigate audit firms in China. From September to November 2022, PCAOB staff members “conducted on-site inspections and investigations in Hong Kong…thoroughly testing all aspects of the agreement necessary to assess whether [Chinese] Authorities would allow complete access.” The PCAOB’s inspections and investigations were pursuant to a written agreement, called the Statement of Protocol, which the PCAOB entered into with Chinese authorities on August 26, 2022. The PCAOB concluded that Chinese authorities “did not obstruct the PCAOB’s ability to inspect and investigate completely, consistent with U.S. law.” Consequently, the PCAOB decided to vacate its previous December 16, 2021 determination, made pursuant to the Holding Foreign Companies Accountable Act (HFCAA), that positions taken by China prevented the PCAOB from inspecting and investigating firms headquartered in mainland China and Hong Kong completely.

Australia: ASIC Releases Update on Recent Enforcement Action in Australia and Guidance for Target Market Determinations

Dec 22 2022

By Jim Bulling and Anabelle Weinberg

1. ASIC enforcement and regulatory update reveals areas of focus

ASIC has published their enforcement and regulatory update outlining the key actions taken between 1 July and 30 September 2022 (REP 753).

United States: SEC Proposes Regulation Best Execution

Dec 16 2022

By: Stacy L. Fuller and Nicholas O. Ersoy

On December 14, 2022, the U.S. Securities and Exchange Commission (“SEC”) proposed Regulation Best Execution (“Regulation Best Ex”) under the Securities Exchange Act of 1934, as amended. Regulation Best Ex would generally impose requirements on broker-dealers to use reasonable diligence to ascertain the best market for a security transaction and buy or sell in such market so that the resultant price to the customer is as favorable as possible under prevailing market conditions, subject to certain exemptions. For over half-of-a-century most broker-dealers have been subject to the Financial Industry Regulatory Authority’s best execution rule 5310, but if Regulation Best Ex is adopted, the SEC would begin to regulate best execution directly.

Australia: ASIC Gears Up Enforcement Activity

Dec 08 2022

By Jim Bulling and Anabelle Weinberg

1. ASIC takes further action on greenwashing

ASIC has issued three infringement notices to investment manager Vanguard Investments Australia Ltd (Vanguard) in further action against alleged greenwashing.

ASIC was concerned that Product Disclosure Statements for the Vanguard International Shares Select Exclusions Index Funds may have misled the public by overstating an investment screen which claimed to prevent investment in companies involved in significant tobacco sales.

Australia: Australian Government abandons introduction of limited partnership structure

Oct 26 2022

By Kane Barnett

The Australian Government has delivered the 2022-23 Federal Budget. One of the announcements relevant to the investment funds industry was that the Government “has reviewed and will not proceed with … the 2016–17 Budget measure that proposed introducing a new tax and regulatory framework for limited partnership collective investment vehicles”.

Australia: Regulatory update – 24 October 2022

Oct 24 2022

By Jim Bulling and Hugo Chow

ASIC’s crackdown on product disclosures continues

To date, ASIC has issued 11 design and distribution obligations stop orders, with the first stop orders being issued in July this year.

The latest interim stop order prevent a fund management firm (the Firm) from offering or distributing three funds (the Funds) to retail investors due to the Firm not having compliant target market determinations (TMDs).

United States: As the WORM Turns: SEC Provides Alternative Recordkeeping Requirements for Brokers

Oct 12 2022

By: Eden L. Rohrer, Chloe Vargas, and Raymond F. Jensen

On October 12, 2022, the SEC voted to adopt new electronic recordkeeping requirements for broker-dealers in an effort to modernize recordkeeping requirements and to allow broker-dealers to use new technologies to satisfy their obligations. The new recordkeeping requirements will amend the Securities Exchange Act of 1934 (“Exchange Act”) Rule 17a-4 (“Rule 17a-4”) for broker-dealers and Exchange Act Rule 18a-6 (“Rule 18a-6”) for Security-Based Swap Dealers, and Major Security-Based Swap Participants.

Significant to broker-dealers is that they will no longer be required to preserve electronic records in a non-rewritable, non-erasable or read once, write many (“WORM”) format. The new rule is technology neutral, allowing broker-dealers to adopt new technologies. The amended rule will eliminate references to outdated technology such as “micrographic media,” “microfilm or microfiche,” and “optical disk technology (including CD-ROM),” in their heyday when the rule was adopted in 1997.

Australia: DDO Implementation and Enforcement

Aug 01 2022

By Daniel Knight and Simon Kiburg

ASIC have announced the first enforcement action it has taken in relation to the Design and Distribution Obligations (DDO), which were introduced late last year. The enforcement action shows that, as described by ASIC deputy chair Karen Chester, “ASIC’s focus has now shifted to compliance. Industry has had sufficient time to bed down its implementation of the DDO regime.“

Australia: ASIC Provides Practical Guidance as Long Awaited CCIV Arrives

Jun 23 2022

By Kane Barnett and Bernard Sia

ASIC has published Information Sheet 272 (INFO 272) and Report 728 (REP 728) on the eve of the corporate collective investment vehicle’s (CCIV) commencement.

With the commencement date for CCIVs being 1 July 2022, today ASIC released 7 regulatory guides relating to the registration and licensing requirements for CCIVs. We outline the key features of CCIVs in our previous update. INFO 272 provides much needed clarity on how both the CCIV itself and its initial sub-funds are to be registered.

Australia: New Greenwashing Guidance

Jun 16 2022

By Jim Bulling and Alex Morrison

ASIC has released Information Sheet 271 (INFO 271) to assist responsible entities of managed funds, corporate directors of CCIVs and trustees of registerable superannuation funds (Product Issuers) in avoiding ‘greenwashing’ when offering sustainability-related products (Products). INFO 271 describes greenwashing and provides a comprehensive overview of the current regulatory setting for communications about sustainability–related products.

Category:Distribution