On May 19, 2015, the SEC proposed various amendments to Form ADV that are intended to collect more information from investment advisers about their separately managed accounts and the nature of assets held in them, as well as investment advisers’ social media activities (a more detailed description of the proposed amendments can be found here).

The comment period for the proposed amendments ended on August 11. While final SEC action on the proposed amendments is not expected imminently, Institutional Investor wrote on Wednesday, September 9 that investment advisers and their Chief Compliance Officers may be well advised to use this time prior to SEC final action to begin considering what changes may be necessary in their internal systems and data collection procedures in order to comply with the anticipated changes to Form ADV.

The article states that CCOs generally have not yet begun to treat this with a great deal of urgency, but it also notes that the proposed amendments can serve as a good indicator of specific data the SEC desires to collect,  such as securities-level detail with respect to separately managed accounts. Because many investment advisers’ systems and procedures may not currently be designed to collect this information in an efficient manner, it may behoove advisers to devote some time and resources now, prior to a final release and adoption of rules, to consider how their systems and procedures can be revised to do so.

Winston & Strawn will continue to monitor developments related to the SEC’s proposed amendments to the Form ADV. Please contact your Winston & Strawn attorney if you would you like to discuss these matters further.

Last month, the U.K. Financial Conduct Authority (“FCA”), in conjunction with the Prudential Regulatory Authority (“PRA”), finalized rules surrounding the application of its new accountability regime to senior managers and other individuals employed by financial firms operating in the U.K. The package of rules and policies issued by the agencies represents the culmination of efforts by regulators to clarify and solidify standards of responsibility for individuals working in the financial industry in the U.K.

The FCA issued two sets of final rules related to the new accountability regime. FS15/3 Strengthening accountability in banking: UK branches of foreign bank—Feedback on FCA CP15/10 sets out near-final rules that apply the accountability regime to individuals working in U.K. branches of overseas banks. The FCA’s rules requires senior managers of U.K. branches of foreign banks to be subject to regulatory approval and a clearly allocated set of responsibilities, as well as to ongoing assessment of their fitness by their firms. Additionally, these institutions will be required to certify the fitness of all of their employees under the regime. The rules tailor the regime to the differences between incoming branches and U.K. relevant firms. FCA FS15/3.

The FCA also published its final rules for the approved persons regime for individuals employed by insurance firms subject to Solvency II. Solvency II is the regulatory framework for insurance firms in the European Union, which became effective earlier this year. The Solvency II regime established a more risk-sensitive prudential framework based on the risk profiles of individual insurance companies and sets out requirements surrounding risk management, transparency, and capital requirements. European Commission Press Release. The FCA’s final rules for Solvency II firms include changes to the scope of the approved persons regime, changes to the assessment of candidates for Significant Influence Function roles to reflect Solvency II and European Insurance and Occupational Pensions Authority (“EIOPA”) guidelines, new conduct rules for approved persons in Solvency II firms, and changes to governance arrangements to support the increased accountability requirements of senior staff. FCA PS15/21.

Simultaneously with the release of the FCA’s rules, the PRA published a suite of policy statements detailing how the new accountability regime will apply to various PRA-regulated firms.  In PS20/15 Strengthening individual accountability in banking: UK branches of non‐EEA banks, the PRA issued the final and near-final rules detailing the application of the Senior Mangers Regime (“SMR”), Certification Regime and Conduct Rules to U.K. branches of non-European Economic Area (“EEA”) banks and non-EEA branches of PRA-designated investment firms. The rules will require that individuals located overseas who are directly responsible for implementing a non-EEA bank or firm’s strategy in the firm’s U.K. branch or U.K. subsidiaries obtain PRA approval and will be subject to Conduct Rules for Senior Managers and certain Prescribed Responsibilities for Senior Managers. PRA PS20/15.

The PRA additionally released a second set of final rules to implement the Senior Insurance Managers Regime (“SIMR”) for U.K. insurance firms subject to Solvency II and responded to feedback it received to several related proposals.  Among other things, the new final rules clarify the way in which firms use Conduct Standards to conduct assessments of senior managers and non-executive directors, extend the deadline for firms to prepare scope of responsibility statements for grandfathered individuals, and retain the requirement that firms obtain references from former employers for any individuals seeking PRA approval as a senior manager. PRA PS22/15. In conjunction with this policy statement, the PRA issued a supervisory statement in which it explained its expectations for insurance firms in complying with the SIMR. PRA SS35/15.

Finally, the PRA set out final rules in PS 21/15 The Senior Insurance Managers Regime: a streamlined approach for non‐Solvency II firms, which would replace the current Approved Persons Regime with a streamlined version of the SIMR for smaller insurance firms not subject to Solvency II and non-Directive firms (“NDFs”) with less than £25 million in assets.  Among other things, the final rules require that relevant firms must have at least one senior manager approved by the PRA who is responsible for the conduct of the firm’s regulated activities, firms must conduct assessments to ensure their senior managers behave in a manner that is fit and proper, and firms must create and maintain records of the significant responsibilities allocated to senior managers. PRA PS 21/15. The policy statement also proposes applying an SIMR similar to the regime for Solvency II firms to non-Solvency II firms with more than £25 million in assets.  This proposal is set out in a consultation paper issued concurrently with the policy statement; comments should be submitted on or before October 12, 2015. PRA CP26/15.

While both the PRA and the FCA will continue to seek consultation on additional rule changes, the new accountability regimes will become effective on March 7, 2016.