SEC Registration Freeze Has Been Lifted For UK-Based Firms

October 5, 2020 by Sara Beier, Crystal Christian


Correctional note: as at 15 October 2020

ACA has been made aware that the SEC is only considering registration of firms located in the UK and not also the EU. The blog post below has been updated to reflect this correction. 

The SEC’s comfort with document production as described in our original alert resulted from an analysis by the UK’s Information Commissioner’s Office (“ICO”). The ICO was asked by an industry working group to provide its view as to the application of certain GDPR provisions as they apply to UK firms, and thus the SEC’s willingness to consider registrations of firms governed by GDPR only extends to the UK at this time. The working group included representatives from UK governing bodies, industry associations, legal and consulting firms. 


 

ACA has observed recent communications from the U.S. Securities and Exchange Commission (SEC), which indicate that the U.S. regulator has overcome its concerns that the General Data Protection Regulation (GDPR) prevents registered investment advisers from providing certain books and records to the SEC for inspection. 

As such, the SEC has begun to approve pending registrations of UK advisers wishing to do business in the U.S. or to attract U.S. investors.

This welcome development is the culmination of prolonged and concerted efforts of various industry participants in the UK, including but not limited to the ICO, AIMA, the Investment Association and ACA.

What Does Registration with the SEC Entail?

Registering with the SEC can be a time-consuming process. The initial step is the completion of Parts 1 and 2A of the Form ADV. Part 1 includes a number of questions about your firm, including identifying information, industry affiliations, information about your advisory business, and control persons. Part 2A requires disclosure in a narrative format of your firm’s activities and conflicts of interest.
 
Once submitted, the SEC has up to 45 days to consider and approve your registration, at which time your firm must have finalized and adopted compliance policies and procedures reasonably designed to prevent violations of the U.S. securities laws. 
 

How We Help

Contact us on +44 (0)20 7042 0500 to learn more about how we can help you with your SEC registration and compliance programme development as well as your cybersecurity challenges.  Our services include:

  • SEC Registration and Compliance Programme Development: If your firm is contemplating SEC registration, our dedicated SEC specialists in our London regulatory compliance practice are on hand to help. We have assisted over 100 firms outside of the U.S. register with the SEC, and frequently work with our UK clients in meeting the requirements of both the FCA and SEC by building a single, comprehensive compliance programme. Once your registration is approved, our local SEC team can also provide ongoing support and conduct required annual reviews of compliance programmes. 
  • Preparation for SEC Examinations: In addition, we expect to see increased SEC activity in the form of examinations of UK and EU firms now that the registration ban has been lifted. We can help to prepare your firm for an SEC examination with a comprehensive mock audit, and our SEC experts are available to prepare and support your firm throughout the SEC examination process with our customisable SEC Inspection Response services.  
  • Cybersecurity and RiskOur cyber and risk professionals offer a range of GDPR related services and training to help assist you in assessing your company’s compliance.