SEC Rulemaking & Other SEC Actions

SEC Adopts Rules to Enhance Investor Protections Relating to SPACs, Shell Companies, and Projections

On January 24, the SEC announced the adoption of new rules and amendments to enhance disclosures and provide additional investor protection in initial public offerings (IPOs) by special purpose acquisition companies (SPACs) and in subsequent business combination transactions between SPACs and target companies (de-SPAC transactions).

Compliance Date:The rules will become effective 125 days after publication in the Federal Register. Compliance with the structured data requirements (data tagging) will be required 490 days after publication of the rules in the Federal Register.

The press release is available here.

SEC Adopts Rules to Include Certain Significant Market Participants as “Dealers” or “Government Securities Dealers”

On February 6, the SEC announced the adoption of two rules that require market participants who engage in certain dealer roles, in particular those who take on significant liquidity-providing roles in the markets, to register with the SEC, become members of a self-regulatory organization (SRO), and comply with federal securities laws and regulatory obligations.

Compliance Date:One year after the effective date of the final rules.

The press release is available here.

The webcast replay of the open meeting is available here.

SEC Adopts Amendments to Enhance Private Fund Reporting

On February 8, the SEC adopted amendments to Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds, including those that also are registered with the Commodity Futures Trading Commission (CFTC) as commodity pool operators or commodity trading advisers. The amendments, which the CFTC concurrently adopted, “are designed to enhance the ability of the Financial Stability Oversight Council (FSOC) to monitor and assess systemic risk and to bolster the SEC’s oversight of private fund advisers and the agency’s investor protection efforts.”

Compliance Date:The amendments will become effective one year after publication in the Federal Register.

The press release, fact sheet and adopting release are available here.

SEC Proposes Rule to Update Definition of Qualifying Venture Capital Funds

On February 14, the SEC proposed a rule that would update the dollar threshold for a fund to qualify as a “qualifying venture capital fund” for purposes of the Investment Company Act of 1940. The rule would update the dollar threshold to $12 million aggregate capital contributions and uncalled committed capital, up from the current standard of $10 million.

Compliance Date:30 days from publication in the Federal Register.

The press release and proposed rule are available here.

Other SEC Actions and Activity

SEC IAC Meeting Schedule for 2024

On January 26, the SEC published its IAC meeting schedule for 2024.

The schedule is available here.

FINRA

FINRA Provides Update on Targeted Exam: Crypto Asset Communications

In November 2022, FINRA launched a targeted exam to review the practices of certain member firms that actively communicate with retail customers concerning crypto assets and crypto asset-related services. In January 2024, FINRA published an update summarizing initial themes from this targeted exam and posing questions for firms to consider if they use retail communications concerning crypto assets.

The targeted exam letter is available here.

The January 23, 2024 podcast, Compliance and Communication: An Update on FINRA’s Crypto Asset Targeted Exam, is available here.

FINRA Foundation Research Examines Investors of Color

On January 10, the FINRA Investor Education Foundation (FINRA Foundation) announced a new report, Investors of Color in the United States.

The press release is available here.

The report is available here.

Retirement

Automatic Portability Transaction Regulations

On January 29, the DOL’s Employee Benefits Security Administration (EBSA) issued a proposed rule on the automatic portability transaction regulation (the SECURE 2.0 Act of 2022, Section 120).

Comment Period:March 29, 2024 (60 days from publication in The Federal Register).

The proposed rule is available here.