Update: SEC Extends Principal Trading Rule

private fund attorney NYCThe SEC has officially extended the sunset for the temporary principal trading rule under the Advisers Act.  It will now expire on December 31, 2014.

Temporary Rule 206(3)-3T, originally adopted in 2007, allows investment advisors that are dually registered as broker-dealers to sell stocks and bonds from their firm’s product inventory for non-discretionary accounts without making prior disclosure and getting prior written consent for each trade.  Instead, they can provide disclosures on a prospective or annual basis and get oral consents.

In its order, the SEC acknowledged that the principal trading rule “should be considered as part of our broader consideration of the regulatory requirements applicable to broker-dealers and investment advisers in connection with the Dodd-Frank Act.”

The SEC responded to critics by emphasizing that it “has and will continue to examine firms that engage in principal transactions and will take appropriate action to help ensure that firms are complying with [the rule], including possible enforcement action.”

Eckerle Law offers a highest-quality and cost-effective alternative to the traditional law firm model for a wide variety of transactional and regulatory matters serving all your business law needs. Our experienced attorneys also provide a full range of compliance services for investment advisers, offering compliance tools that are tailored to fit the ever changing regulatory landscape as well as your business needs.

If your company would like to strengthen its business practices, please contact us today so we can leverage our experience to create real-life business and legal solutions to help your business thrive.