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The purpose of this paper is to explain amendments to the Investment Advisers Act custody rule, that recently became effective, which are intended to provide advisory clients with additional protections when a registered investment adviser has access to client assets.

The paper explains changes to the custody rule related to the definition of custody, delivery of account statements, surprise examinations, exemptions related to pooled investment vehicles, required internal control reports for advisers who maintain client assets themselves, the surprise examination requirement for privately offered securities, and amendments to Form ADV. It also explains effective and compliance dates.

Advisers should consider how to revise and tailor their written policies and procedures relating to custody; whether to continue the use of affiliated custodians; how to allocate the expenses for compliance with the new requirements, including accountants' fees for surprise examinations, internal control reports and liquidation audits; and whether to amend fund disclosure documents or separate account agreements to address expense allocation or other issues arising as a result of the new requirements.

The paper provides practical guidance from experienced securities lawyers.

The purpose of this paper is to explain three new rules FINRA has proposed as part of the process of developing a consolidated rulebook: Rules 4314 (Securities Loans and Borrowings), Rule 4330 (Customer Protection – Permissible Use of Customer Securities), and Rule 4340 (Callable Securities).

The paper explains Rule 4314, which sets forth the requirements for a member firm that is a party to an agreement for the loan or borrowing of securities; Rule 4330, which governs the borrowing or lending of a customer's margin securities that are eligible to be pledged or loaned; and Rule 4340, which establishes the obligations of a member as to callable securities in its possession or control.

Broker‐dealers engaging in securities lending activities will need to review their agreements, disclosures and recordkeeping procedures in order to comply with the proposed rules upon their adoption, particularly those who may engage in such activities involving fully paid and excess margin securities. As to the proposed new rule on callable securities in their possession and control, broker‐dealers will need to review their recordkeeping procedures and consider whether they want to adopt more flexible procedures on allocations involving partially redeemed or called securities.

The paper provides practical guidance from experienced securities lawyers.

The purpose of this paper is to explain a study released by the Securities and Exchange Commission on January 21, 2011, the “Fiduciary Study,” concerning legal and regulatory standards of care for providing investment advice and recommendations to retail customers.

The paper explains the Fiduciary Study's concern that retail investors do not fully understand the roles played by, and the different standards of care that apply to, investment advisers and broker‐dealers. It summarizes the SEC's core recommendations concerning uniform investment adviser and broker‐dealer standards for conduct, avoidance of conflicts of interest, fiduciary duties, principal trading, duty of care owed to investors, personalized investment advice about securities, and investor education. It summarizes the SEC's recommendations on harmonizing investment adviser and broker‐dealer regulations on advertising and other communications, use of finders and solicitors, supervision, licensing and registration of firms, licensing and continuing education requirements for professionals, and books and records.

The SEC's core recommendations are designed to clarify the respective roles of, and establish uniform standards for, investment advisers and broker‐dealers, so that retail investors will be better informed and protected.

This paper provides a useful summary and practical advice from experienced financial services lawyers.

This paper aims to explain the SEC's new Rule 201 and amended Rule 200(g), which are designed to improve the regulations that address harmful shortselling practices.

The paper summarizes Rule 201, discusses the reasoning behind the “alternative uptick rule”, defines “covered securities” to which Rule 201 applies, explains why the commission chose the national best bid as the basis of the execution of short sales during the circuit breaker period, discusses the SEC's policies and procedures approach, explains conditions under which a broker‐dealer submitting a short‐sale order after the circuit breaker is triggered submitting a short sale order after the circuit breaker is triggered may mark the order “short exempt,” explains the reason an exception for market making activities is not included in the rule, and discusses the implementation period and the need for broker‐dealers to develop new policies and procedures.

Broker‐dealers and other market centers will need to dedicate significant compliance and systems resources to develop the policies and procedures and systems enhancements necessary to comply with the rule.

The paper provides practical guidance from experienced securities lawyers.

To provide an overview of the guidance for proxy firms and investment advisers included in the Staff Legal Bulletin released this year by the Securities and Exchange Commission (SEC) after its four-year comprehensive review of the proxy system.

Discusses briefly the context in which the SEC’s review was conducted; the general themes of the guidance provided; the most notable aspects of the guidance; and the matters that were expected to be, but were not, addressed by the SEC.

The guidance does not go as far in regulating proxy advisory firms as many had anticipated it would. The key obligations specified in the guidance are imposed on the investment advisers who engage the proxy firms. The responsibilities, policies and procedures mandated do not change the fundamental paradigm that has supported the influence of proxy firms – that is, investment advisers continue to be permitted to fulfill their duty to vote client shares in a “conflict-free manner” by voting based on the recommendations of independent third parties, and continue to be exempted from the rules that generally apply to persons who solicit votes or make proxy recommendations.

The SEC staff states in the Bulletin that it expects that proxy firms and investment advisers will conform to the obligations imposed in the Bulletin “promptly, but in any event in advance of [the 2015] proxy season.”

Practical guidance from experienced M&A lawyers.

A faculty development program (FDP) introduced postsecondary instructors to a module focused on the food–energy–water (FEW) nexus, a socio-hydrologic issue (SHI) and a sustainability challenge. This study aims to examine factors influencing faculty interest in adopting the instructional resources and faculty experience with the FDP, including the gains made during the FDP on their knowledge about SHIs and their self-efficacy to teach about SHIs, and highlighted characteristics of the FDP.

Data from n = 54 participants via pre- and post-surveys and n = 15 interviews were analyzed using mixed methods.

Findings indicate that over three quarters of participants would use the curricular resources to make connections between complex SHIs, enhance place-based learning, data analysis and interpretation and engage in evidence-based decision-making. In addition, participants’ experience with the workshop was positive; their knowledge about SHIs remained relatively constant and their self-efficacy to teach about SHIs improved by the end of the workshop. The results provide evidence of the importance of institutional support to improve instruction about the FEW nexus.

The module, purposefully designed, aids undergraduates in engaging with Hydroviz, a data visualization tool, to understand both human and natural dimensions of the FEW nexus. It facilitates incorporating this understanding into systematic decision-making around an authentic SHI.