SEC Issues Guidance Update for Registered Investment Advisers on Personal Securities Transactions Reports

The SEC Division of Investment Management issued an Investment Management Guidance Update regarding personal securities transactions reports. The update is directed toward registered investment advisers reports on securities held in accounts over which reporting persons had no influence or control.

According to the Guidance Update, Investment Advisers Rule 204A-1 ("Investment Advisor Code of Ethics") provides that a registered investment adviser must establish, maintain, and enforce a written code of ethics that require, among other things, its directors, officers and partners and its supervised persons who have access to nonpublic information regarding securities transaction to report their personal securities holdings and transactions.

The Guidance Update noted that (b)(3)(i) provides an exception to these reporting requirements when an access person's securities are held in accounts over which he or she had "no direct or indirect influence or control." The Guidance Update discusses the policies and procedures necessary to negate "influence or control."

See: SEC IM Guidance Update.