Dodd-Frank Act governance and compensation requirements: a “punch list” of action items

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act")1, enacted earlier this summer, imposes significant new corporate governance and executive compensation requirements that apply not just to financial institutions, but to public companies generally. Since many public companies begin in the fall to focus on the upcoming proxy season, this client alert is intended to provide a "punch list" of potential governance and compensation action items management and boards of directors should consider in order to comply with the Act’s new requirements.

Clcik here to read the article: Punch List

Congress passes small business lending bill

Now here is something that could help spur growth in the economy.

The Senate and the House of Representatives have passed the small business lending bill. The legislation, among other things, creates a $30 billion fund to provide capital for banks with assets under $10 billion to increase their small business lending. .... the U.S. Treasury Department is expected to begin working with regulators within a week to develop the program’s term sheet and application. The bill also includes provisions that increase the Small Business Administration 7(a) guarantee program’s maximum loan size from $2 million to $5 million, and provide $505 million to maintain its temporary 90% loan guarantee.


Click here ro read the article: Congress Passes Small Business Lending Bill

Auditors of Nonpublic Broker-Dealers

......the SEC’s exemption permitting nonpublic broker dealer firms to have their financial statements audited by independent public accounting firms not registered with the PCAOB expired on Dec. 31, 2008. The SEC’s exemption was initially by order issued Aug. 4, 2003, and subsequently extended three times. The extension, issued as a result of amendments to §17(e)(1)(A) of the Securities Exchange Act of 1934 by the Sarbanes-Oxley Act, was based on the fact that application of registration requirements and procedures to auditors of nonpublic broker-dealers was still being considered.



For the full story click here: Auditors of Nonpublic Broker-Dealers

Pay-to-play: proposed MSRB guidance regarding PACs under Rule g-37

The Municipal Securities Rulemaking Board (“MSRB”) recently filed with the Securities and Exchange Commission (“SEC”) proposed guidance regarding affiliated Political Action Committees (“PACs”) for purposes of the pay-to-play limitations imposed on municipal securities dealers under MSRB rule G-37.  Much of the Proposed Guidance consolidates MSRB policy statements regarding PACs that were previously approved by the SEC. While the Proposed Guidance is aimed at municipal securities dealers, if approved by the SEC it will likely serve as precedent for similar limitations imposed on investment advisers by Rule 206(4)-5 under the Investment Advisers Act of 1940.

Click here to read the full story: Pay-to-play: proposed MSRB guidance regarding PACs under Rule g-37

Frustration mounts: Experts, RIAs identify six most important unknowns about the switch to state oversight

With many RIAs staring down the onerous task of registering in multiple states, while coping with a new, more demanding ADV form, frustration is mounting at the lack of information from the SEC and the lack of uniformity among the states..... it was only a few days ago that the SEC posted the first shred of information about the switch to state oversight. That shred of information was the news that the commission plans to release its proposed rules between October and December.

The most difficult issues are clearly those surrounding the dual registration requirements, that call for advisors with an office or five or more clients in a state to register in it. An advisory firm that would be required to register in 15 or more states under the law can opt to remain SEC-registered; there’s also an exemption for advisory firms with institutional clients. It’s not clear to what extent registering in a state subjects an advisor to the different state regulations.


Click here for the full story: Frustration mounts: Experts, RIAs identify six most important unknowns about the switch to state oversight

The SEC Releases a Timetable for Dodd-Frank Rulemaking

The SEC has released a timetable of its upcoming rulemaking efforts to implement provisions of the Dodd-Frank Act. Between October and December, the SEC will issue proposed rules on the following: shareholder “say on pay” votes on executive compensation, disclosure by investment advisers of votes on compensation matters,  new listing standards regarding compensation committee independence and factors affecting compensation adviser independence, and disclosure of consultant conflicts.

Between April and July 2011 the SEC will adress: the disclosure of pay-for-performance, pay ratios, and stock hedging by employees and directors, the recovery of erroneously awarded compensation and rules that define “other significant matters”.

Click here to see the full timetable:   SEC Releases a Timetable for Dodd-Frank Rulemaking

Municipal Advisers Must Register With the SEC by October 1

The Securities and Exchange Commission announced on September 2, 2010, that it has adopted a temporary rule requiring municipal advisors to register with the SEC by October 1, a deadline established by the newly-enacted Dodd-Frank Wall Street Reform and Consumer Protection Act.

Municipal advisors can now access and complete the new registration form (Form MA-T) on the SEC’s website. Municipal advisors are encouraged to begin the registration process as soon as possible because of the impending registration deadline and the requirement that applicants first obtain an ID and password.
The SEC implemented the registration provision on an interim basis in order for municipal advisors to meet the new law’s October 1 registration deadline. The SEC expects to propose a permanent rule later this year.

For more information click here: Municipal Advisers Must Register With the SEC by October 1

New "Narrative" ADV Part 2 Requirement

The SEC has amended Part 2 of Form ADV to require registered investment advisers (RIA) to provide clients with clearly written, current and meaningful disclosures, in plain English, about the adviser’s business practices, conflicts of interest and certain personnel. This becomes effective October 12, 2010.

To read the specific details of the SEC’s 174 pages of requirements,click here: SEC ADV Part 2 Requirements

SEC Transitioning Auditing Responsibility to the States for RIAs with less than $100 Million in AUM

Section 410 of the Dodd-Frank Wall Street Reform and Consumer Protection Act states that an investment adviser with assets under management greater than $100 million will need to register with the SEC, while an adviser with assets under management less than $100 million will need to register in the state in which it maintains its principal office. Those advisers who operate in more than 15 states would be permitted to register with the SEC. This change is effective July 21,2011.

To read the full Act, click here: Dodd-Frank Wall Street Reform Act

Compliance Services

The Advisers Act requires all investment advisers to develop and implement compliance programs. Such compliance programs must include written policies and procedures reasonably designed to prevent violation of the Advisers Act. In today's ever evolving environment of securities regulation, more time and attention is required than ever before. The penalties for non-compliance with SEC regulations can ruin a firm. We stay abreast of new SEC and State rules and investment adviser regulatory requirements so that we only offer up-to-date advice and ensure your firm is in compliance with new rules and regulations as they occur.

Red Oak can save you time and money by reducing your full-time staffing needs while staying compliant with the regulatory bodies. Our highly qualified compliance consultants are here to help you improve efficiency, increase profitability and make your job easier.