Happy last Friday of April.
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Cole-Frieman & Mallon LLP 2017 1st Quarter Update – we were a little late for this first quarter but the update addresses a number of items including:
- Trump and Dodd-Frank Reform
- DOL Fiduciary Rule Delay
- Bitcoin Regulatory Matters
- California’s Public Investment Fund Disclosure Requirements
- SEC No-Action Letter and Guidance Clarify Inadvertent Custody
- SEC / FINRA 2017 Exam Priorities
- Compliance Calendar
Trump Tax Plan & Financial Industry – while our quarterly update talked in part about potential future reform of the financial system, there is not really much to say yet about Trump’s one page tax plan. We do know, obviously, that the details will be forthcoming, but this plan leaves a lot of open questions and (surprise) remains silent on the carried interest issue. One item to note is that the tax plan proposes to repeal the 3.8% Obamacare tax – this is important because many fund managers have established structures to minimize the impact of this tax to the manager. As more information rolls out, we expect to hear from both accountants and tax planners about how any new tax plan would affect the private funds industry.
Blockchain / Cryptocurrency / Altcoin Items – there continues to be an onslaught of items dealing with blockchain technology in the financial services sector, and we included some discussion of these items in our quarterly update linked above. On Wednesday of this week I attended EY’s Global Blockchain Summit in San Francisco (more on this coming soon). In addition, FINRA just announced a Blockchain Symposium which will be held in New York on July 13. According to the announcement, the “half-day program is designed to bring together regulators and industry leaders to discuss the use of blockchain and related opportunities and challenges.” It is important to note that blockchain appears to be an inevitable new structure/paradigm in business generally and investment management specifically – surprisingly, the regulators seem to be aware of this sea change and ready to work with the industry to implement appropriate regulatory structures to address investor protection concerns.
Other Items
Connecticut Hedge Fund Tax – there have been a few news articles about a potential tax on private fund managers in Connecticut. I have not kept up on this issue in depth, but it should be interesting to see how this plays out and whether any other states will follow suit.
FINRA Insider Trading Information – FINRA has begun to take an active role in finding and dealing with insider trading. Just recently they released an interesting video with Cam Funkhouser, Executive Vice President of FINRA’s Office of Fraud Detection and Market Intelligence (OFDMI), about insider trading and some “red flags” to look out for.
FINRA Bootcamps – FINRA announced three compliance boot camps for may – Dallas (May 11), Memphis (May 17) and Charolette (May 31).
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Bart Mallon is a founding partner of Cole-Frieman & Mallon LLP and focuses his legal practice on the investment management industry. He can be reached directly at 415-868-5345.