The following are summaries of key developments in the investment management industry. For more detailed coverage of these and other topics, please click here.

FinCEN Finalizes Beneficial Ownership Identification Rules

As part of the U.S. Treasury Department's ongoing efforts to prevent bad actors from using U.S. companies to conceal money laundering, tax evasion, and other illicit financial activities, the Financial Crimes Enforcement Network (FinCEN) has issued a final rule to strengthen the customer due diligence (CDD) efforts of "covered financial institutions." The CDD rule, issued May 11, 2016, requires covered financial institutions, including banks, federally insured credit unions, broker-dealers, mutual funds, futures commission merchants, and introducing brokers in commodities, to identify the natural persons that own and control legal entity customers—the entities' "beneficial owners." Covered financial institutions have until May 11, 2018, to comply with the CDD rule.

SEC Issues Guidance Addressing Fund Disclosure Reflecting Risks Related to Current Market Conditions

The Division of Investment Management of the U. S. Securities and Exchange Commission (SEC) issued a guidance update (the Update) in order to "foster investor protection by reminding mutual funds, exchange traded funds, and other registered investment companies of the importance to investors of full and accurate information about fund risks, including risks that arise as a result of changing market conditions." In the Update, the staff notes that it believes that funds should review risk disclosures on an ongoing basis and assess whether they remain adequate in light of current conditions.

To learn more about these developments and other investment management news, please contact a member of the Ballard Spahr Investment Management Group or the attorney with whom you regularly work.


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