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Fund Forum

This issue of Venable's Fund Forum includes the following items:

  • Ten Practical Tips for Broker-Dealers Implementing FinCEN's New Beneficial Ownership Rule
  • Criminal and SEC Action Involving Initial Coin Offering
  • Division of Investment Management Announces Expanded Use of Draft Registration Statement Review Procedures for BDCs
  • SEC Releases Guidance to the Investment Company Liquidity Risk Management Program
  • FTC Obtains Injunction Halting Alleged Cryptocurrency Pyramid Scheme
Checklist

Ten Practical Tips for Broker-Dealers Implementing FinCEN's New Beneficial Ownership Rule

Starting May 11, 2018, broker-dealers and certain other covered financial institutions will need to implement new policies and procedures to comply with FinCEN's new Customer Due Diligence Requirements for Financial Institutions, which require covered financial institutions to identify and verify the identity of beneficial owners of legal entity customers. FinCEN, part of the U.S. Treasury, along with the SEC and FINRA, administers the AML rules for broker-dealers and other financial institutions under the BSA.

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Alarm Clock

Criminal and SEC Action Involving Initial Coin Offering

The list of cases involving ICOs continues to grow. The SEC recently charged the founder and COO of a Delaware corporation with conducting a securities offering without registering with the SEC, allegedly in an attempt to deceive and entice investors to participate in the ICO, along with other criminal charges. The U.S. Attorney's Office for the SDNY also announced that it is independently pursuing criminal charges against the Defendants. The underlying issue remains the same, and this case highlights the various serious potential exposure risks for ICOs that run afoul of the securities laws.

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apple and books

Division of Investment Management Announces Expanded Use of Draft Registration Statement Review Procedures for BDCs

The SEC's Division of Investment Management recently announced that it will accept for nonpublic review certain draft registration statements of business development companies. Among other things, this draft review process allows a company to begin the registration process without revealing confidential or proprietary information to the public.

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magnet and coins

SEC Releases Additional Guidance to the Investment Company Liquidity Risk Management Program

The Division of Investment Management updated the Investment Company Liquidity Risk Management program's frequently asked questions (FAQs) to respond to new questions that the Staff has received regarding the liquidity rules under Investment Company Act Rule 22e-4. Rule 22e-4 requires each registered, open-end management investment company to establish a liquidity risk management program.

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Traffic lights

FTC Obtains Injunction Halting Alleged Cryptocurrency Pyramid Scheme

It is perhaps not surprising that companies are already trying to make money (allegedly the unlawful way) from cryptocurrencies. Last week the FTC demonstrated that it can keep up with any marketplace trend when it succeeded in obtaining a federal court order to shut down a cryptocurrency-related pyramid scheme. This is the first action brought by the FTC involving cryptocurrencies since 2016, which, along with its 2015 action, is only the third ever FTC action in the space.

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UPCOMING EVENTS

Lucia v. SEC – What Does This Decision Mean for Regulated Businesses?

May 15, 2018 | Webinar

Members of Venable's Consumer Financial Services, Securities Enforcement, and Regulatory Practices ‎will share their experiences from the front lines, offer insights into this constitutional question, and discuss the practical implications for parties that litigate before the CFPB or SEC. CLE is available.

Register

Risk and Culture: How to Maximize Good Firm Culture to Mitigate Risk within Your Organization

June 14, 2018 | Venable's New York Office

This program is appropriate for professionals from business, financial services, banking institutions, and investment funds, and for those in leadership roles.

Register

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