Editor column

Article Type: Editor column From: Journal of Investment Compliance, Volume 12, Issue 4

We begin this issue with Jack Governale’s comprehensive explanation of the rules relating to investment advisers adopted by the US Securities and Exchange Commission (SEC) under the provisions of the Dodd-Frank Wall Street Wall Street Reform and Consumer Protection Act. Then, addressing different provisions of the Dodd-Frank Act, Allison Lurton, Bruce Bennett, Robert Fleishman and William Massey provide a summary of the final Commodity Futures Trading Commission (CFTC) rules prohibiting manipulation of the commodity markets. Next Arthur Delibert and Gregory Wright explain the US Supreme Court’s narrow interpretation of Rule 10b-5 in not allowing expansion of secondary liability for aiding and abetting under the federal securities laws and advise fund directors, officers, and advisers to consider broader questions about the allocation of liability for prospectus content. Edward Pittman, Christopher Harvey, Michael Sherman, and Brenden Carroll explain the SEC’s responses to a series of frequently asked questions concerning SEC Advisers Act Rule 203(4)-5, which prohibits “pay to play,” the practice of making campaign contributions and related payments to elected officials in order to influence the awarding of lucrative contracts for the management of public pension plan assets and similar government investment accounts. Roger Blanc,Daniel Schloendorn, Howard Kramer, Martin Miller, and Matthew Comstock discuss the SEC’s new large trader reporting system, established to address the Commission’s concern over the possible effects of high-volume trading on market volatility. David Martin and Keir Gumbs explain a court decision that for the time being impedes the SEC’s long-standing efforts to adopt a rule that would require a public company, under certain circumstances, to include in its proxy materials shareholder-proposed nominees to its board of directors; discuss the possibility for future SEC shareholder-access initiatives; and note the important aspect of the court decision concerning the Commission’s need to assess the economic effects of any rule. Jason Lane reviews recent regulatory enforcement sanctioning firms for failure to safeguard material non-public information (MNPI) and recommends that a firm conduct a comprehensive review of its business to understand which units come into possession of MNPI and how related entities – for example investment banking and research –interact with one another and could potentially share MNPI. Adrienne Baker explains the Foreign Account Tax Compliance Act (FATCA), enacted in March 2010 to prevent a US person from excepting US tax liability by owning US assets through foreign accounts, and highlights areas of particular interest to non-US investment funds. Finally, Alexander Anichkin and Yulia Prudnikova eplain the new Russian insider trading law, which came into effect in July 2011, and a number of issues concerning practical operation of the law that are yet to be resolved.

Henry A. DavisEditor