SEC Releases Observations of Registered Investment Firm Initiatives | Goodwin

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REGULATORY DEVELOPMENTS

SEC DIVISION OF EXAMINATIONS PUBLISHES OBSERVATIONS OF ITS REGISTERED INVESTMENT COMPANY INITIATIVES

Staff of the SEC’s Examinations Division (the Division) recently issued a risk alert highlighting observations of its “RIC Initiatives” – over 200 mutual fund and ETF reviews and nearly 100 investment advisers between 2018 and 2019. The Risk Alert sought to answer three key questions and highlighted a number of frequently cited gaps or weaknesses, painting a broad picture of the Division’s observations on industry trends in where funds and advisors can improve on compliance, while providing insight into the continuing direction of the Domains Division.

Read the Client Alert to learn more about the division’s observations and key takeaways for funds and advisors reviewing their compliance programs.

THE TRUTH IN THE LOAN ACT: REVISED INTER-INSTITUTIONAL REVIEW PROCEDURES AND CANCELLATIONS

FFIEC has revised the interagency review procedures for the Truth in Lending Act (TILA) and Regulation Z. The revised interagency procedures reflect recent changes to Regulation Z, including (i) the revised definition of qualified mortgage General (QM), (ii) the creation of a new category of QMs known as Seasoned QMs, (iii) an extension of the expiration date for the temporary government sponsored corporate QM and (iv) a postponement of the mandatory compliance date for the new general definition of QM until October 1, 2022.

The CFPB ISSUES GUIDELINES ON THE INFORMATION REQUIREMENTS ON THE VALIDATION OF DEBT COLLECTION RULES

On October 29, the CFPB released several guidance documents, including a new section of the Debt Collection Rule Frequently Asked Questions, dealing with the use of the Validation Notice template and the Special Debt Collection Rule. validation information for some residential mortgage debts, as well as a guidance document titled, “Debt Collection Rule: Disclosure of Model Validation Notice Detail Table,” illustrating how a debt collector can comply with the ‘obligation to disclose certain required validation information. These guidelines follow the Spanish translation of the model validation notice issued by the CFPB on October 18 in a broader effort to help the industry prepare to comply with the new debt collection rule by now. its effective date of November 30, 2021.

REMINDER – NEXT RETIREMENT OF THE OTC BULLETIN BOARD (OTCBB)

In Regulatory Notice 21-28, FINRA announced that it was removing the 6500 series of rules, other OTC Bulletin Board (OTCBB) related rules and planned to cease operations effective November 8, 2021. In anticipation of this change, FINRA modified the TDDS, ORF TRAQS User Guide and ORF Web API specifications.

“By sharing the information contained in this risk alert, the division encourages the funds and their advisors to review their practices, policies and procedures in these areas and to consider improvements in their compliance programs and their disclosure practices, if necessary. . “
– The Examinations Division of the SEC

RETAIL CREDIT: REVISED CONTROLLER MANUAL AND REVISIONS

On October 28, the OCC released version 2.0 of the Retail Loan booklet. Controller Manual. This brochure discusses the risks associated with retail lending and provides a framework for reviewers’ assessments of risk management activities. The revised brochure: reflects changes in laws and regulations since the last update of this brochure; reflects OCC programs published and canceled since the last update of this booklet; includes clarification of changes regarding prudential guidance, good risk management practices and legal language; and revise some content for general clarity.


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