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SEC Proposes New Broker-Dealer Regulations and Interpretations

The following proposed rules and interpretations by the Securities and Exchange Commission (“SEC”) aim to improve transparency regarding investors’ relationships with investment advisers and broker-dealers: Regulation Best Interest would require a broker-dealer to act in a retail customer’s best interest when recommending any securities transaction or investment strategy concerning securities to a retail customer. This regulation attempts to clarify that a broker-dealer cannot place its financial interests before a retail customer’s interests when making recommendations. A proposed interpretation would clarify the SEC’s opinion of the fiduciary duty investment advisers owe to clients. By stressing principles important to the fiduciary duty,. Read More.

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SEC Hit with Lawsuit on Political Contributions to Public Pension Funds Rule

Joining forces against the U.S. Securities and Exchange Commission (“SEC”), the New York Republican State Committee and Tennessee Republican Party have filed a lawsuit against the agency regarding a rule they claim violates the First Amendment and Administrative Procedures Act (“the Act”). According to the August 7th complaint, both parties contend that a rule restricting an adviser’s political contributions to public employee pension funds imposes on the Federal Elections Commission’s authority to regulate campaign spending as established in the Act. The complaint also asks the U.S. District Court to declare that the SEC lacked proper authority to write the rule.. Read More.

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SEC’s Corp Fin and IM Issue Proxy Voting Guidance

In conjunction with its Division of Corporation Finance (“Corp Fin”), the U.S. Securities and Exchange Commission’s (“SEC”) Division of Investment Management (“IM”) recently issued Staff Legal Bulletin No. 20, Proxy Voting: Proxy Voting Responsibilities of Investment Advisers and Availability of Exemptions from the Proxy Rules for Proxy Advisory Firms. In their respective roles, IM offers guidance for investment advisers’ responsibilities in voting client proxies and preserving proxy advisory firms, and Corp Fin provides guidance on the accessibility and obligations of two federal proxy rule exemptions that are often used by proxy advisory firms. The guidance reflects proxy advisory firms’ ability. Read More.

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