SEC’s 2024 Fiscal Year Summary
2024 has already brought significant changes to the SEC regulatory landscape, impacting all types of investment advisers. Staying compliant requires a forward-looking approach, and we’re here to help guide you through these evolving dynamics. Below are some key trends to be aware of:
Implemented Final Rules
The pace of new regulations requires hands-on expertise from seasoned compliance professionals to navigate the changing requirements of doing business. Some new rules that came into effect this year were:
Shortening the Securities Transaction Settlement (T+1)
Enhanced Reporting of Proxy Votes by Registered Funds; Form N-PX Reporting of Executive Compensation Votes
Tailored Shareholder Reports for ETFs and Mutual Funds
Modernization of Beneficial Ownership Reporting
Form PF; Event Reporting for Hedge Fund and Private Equity Fund Advisers; Requirements for Large Private Equity Fund Adviser Reporting
Enforcement and Examination Trends
Recent SEC exams and enforcement actions have revealed the key areas of focus for enforcement and how the agency intends to handle the implementation of new rules.
The Marketing Rule continues to be a focus and has compelled the SEC to issue three separate risk alerts on the rule. Enforcement actions indicate that the SEC is keen on ensuring substantiation of material facts and that disclosures are provided for 3rd party testimonials and endorsements.
The New T+1 Trade Settlement rule became effective on May 28, 2024, and within two months, the SEC initiated sweep exams on RIAs.
The SEC’s crackdown on off-channel communications has expanded to over 75 firms, resulting in more than $3 billion in fines.
What began as a campaign targeting large banks is now focused on both small and large investment advisers, stressing the importance of capturing all business communications and ensuring employees abide by policies and procedures.
The SEC charged two investment advisers with making false and misleading statements about their use of Artificial Intelligence.
The Enforcement Division's Crypto Assets and Cyber Unit has brought enforcement actions related to fraudulent and unregistered crypto asset offerings while continuing to identify disclosure and controls issues with respect to cybersecurity.
Preparing for New SEC Rules
Adapting to these new rules and the shifting focus of SEC examinations can be challenging, but advisers must carefully plan for a growing slate of new final rules that will take effect over the coming year. This list includes:
Short Position and Activity Reporting, effective 1/2/2025
Form PF Reporting Requirements, effective 3/12/2025
Form N-PORT and Form N-CEN Reporting, effective November 17, 2025 and May 18, 2026.
Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Customer Information, effective 12/3/2025
Fund Names Rule, effective 12/11/2025 and 6/11/2025
CCG’s Conclusion
In an ever-changing regulatory landscape, preparation is key. The SEC’s growing list of new rules and changing examination trends serves as a reminder of the volume, velocity, and complexity of the new regulation promulgation.
The Chenery Compliance team is here to help you navigate these changes to protect you from regulatory risk and ensure your firm is prepared for an eventual SEC exam.