While the Securities and Exchange Commission (SEC) brought several enforcement actions in 2018-19, the most significant new developments were published interpretations and alerts. Other agencies, such as the Commodity Futures Trading Commission (CFTC), also provided new guidance and brought significant enforcement actions.
Fiduciary Interpretation -
In June of 2019, the SEC adopted a new interpretation (the “Fiduciary Interpretation”) defining fiduciary duties for investment advisers as consisting of a duty of loyalty and a duty of care, requiring investment advisers to provide advice that is in the best interests of the relevant client without putting the adviser’s interests ahead of the client’s. The Fiduciary Interpretation specifically defines the duty of loyalty, requires precise disclosure regarding conflicts and establishes a duty of care. For private fund and institutional clients, the Fiduciary Interpretation acknowledges a difference between retail and institutional clients.
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