SEC charges investment adviser and fund trustees with Liquidity Rule violations
The Securities and Exchange Commission (SEC) has charged investment adviser Pinnacle Advisors LLC with aiding and abetting Liquidity Rule violations by a mutual fund it advised. The SEC has also charged the fund’s independent trustees and two of Pinnacle Advisors’ officers.
The Liquidity Rule prohibits mutual funds from investing more than 15% of their net assets in illiquid investments and requires funds to adopt a liquidity risk management program.
The SEC alleges that from June 2019 to June 2020, the fund held approximately 21% to 26% of its net assets in illiquid investments, which violated the Liquidity Rule. Pinnacle Advisors and its officers are accused of failing to present the fund’s board with a plan to reduce the fund’s illiquid investments to 15% or lower and make required filings with the SEC. A third trustee, Joseph Masella, has settled charges that he caused and willfully counseled the fund’s violations. The SEC seeks permanent injunctions and civil money penalties
Feedback is requested by 8th June.
HKMA publishes AML regtech network analytics report
The Hong Kong Monetary Authority (HKMA) has published a report aimed at promoting the adoption of network analytics capability to strengthen the response of banks’ anti-money laundering (AML) systems.
The report highlights the potential of combining intelligence-led analytical tools with rules-based monitoring systems, which will help banks to enhance anti-deception efforts in the prevention, detection and disruption of financial crime. It also shares the experiences of banks already using this capability, and provides practical insights and expert perspectives, guiding banks in their exploration and adoption of network analytics.
MAS consults on payment services regulations
The Monetary Authority of Singapore (MAS) has proposed amendments to the Payment Services Act (PS Act) to extend the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) requirements to newly scoped-in payment services. MAS has also proposed changes to exempt major payment institutions from certain safeguarding requirements, and to extend data collection requirements and revise the scope of application for certain notices. The amendments aim to strengthen MAS’ surveillance of the payment services sector and ensure that licensees and exempt payment service providers comply with group-wide AML/CFT policies.
Feedback is requested by 8th June.
PRA issues new policy statement 4/23
The Prudential Regulation Authority (PRA) has issued PS4/23 – Moving Senior Managers Regime forms from the PRA Rulebook.
The new policy statement confirms changes proposed in an earlier consultation paper (CP2/23) and involve:
- amendments to the Insurance – Senior Managers Regime – Applications and Notifications Part of the PRA Rulebook (Appendix 1);
- amendments to the Non-Solvency II Firms – Senior Managers Regime – Applications and Notifications Part of the PRA Rulebook;
- amendments to the Large Non-Solvency II Firms – Senior Managers Regime – Applications and Notifications Part of the PRA Rulebook (Appendix 1); and
- amendments to the Senior Managers Regime – Applications and Notifications Part of the PRA Rulebook (Appendix 1);
The changes come into effect on 11th May 2023.
FCA issues latest whistleblower data
The Financial Conduct Authority has published its latest data on whistleblowing activity for October to December 2022.
During the period, the regulator received 276 whistleblowing reports – just three fewer than the same period for the previous year. Of those 276, the majority (143) were submitted using the FCA’s online reporting form. Over the course of the quarter, the main complaints received related to compliance, fitness and propriety and culture of the organization.
FCA issues financial promotions Q1 data
The Financial Conduct Authority has also published its latest data regarding breaches of financial promotion regulations during Q1 of 2023. Highlights from the report include:
- 2235 promotions were amended/withdrawn by authorized firms as a result of FCA intervention;
- 539 financial propotions were reviewed; and
- Retail investements and retail lending both made up 45% each of the cases reviewed by the FCA.
Ireland consults on company law
The Irish government has issued a major new consultation on proposals to enhance the Companies Act 2014.
Under four main headings of Corporate Governance; Company Law Enforcement and Supervision; Company Law Administration and Corporate Insolvency including the Regulation of Receivers, the proposed amendments include:
- Making it easier for companies to hold virtual general meetings.
- Enhancing the powers of the Corporate Enforcement Authority, the Irish Auditing and Accounting Supervisory Authority, and the Companies Registration Office.
- Streamlining procedures and strengthening reporting requirements.
- Enhancing certain administrative processes carried out by the Registrar of Companies.
- Modernizing certain administrative requirements for companies.
- Making amendments to various insolvency related processes across the Companies Act.
- Delivering on Program for Government commitments in relation to enhanced regulation of receivers.
- Including amendments to the “Small Companies Administrative Rescue Process” (SCARP).
The changes are designed to make it easier for companies to comply with the law, improve the efficiency of corporate governance, and protect the interests of stakeholders.
Comments are requested by 9th June 2023.
A selected summary of key developments for regulated financial institutions
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