Policy Patty Toolkit 

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The Policy Patty Toolkit Blog covers emerging issues on governance, risk and compliance controls.

This Blog is made available by the Policy Patty Toolkit for informational purposes only to cover emerging legal, governance, regulatory and compliance matters and issues. The postings are not intended to provide specific professional advice (legal, tax, or accounting) to an identified problem or issue. By using this Blog, you understand and acknowledge that there is no attorney-client relationship formed between us and should not use this site as a substitute for legal advice from your legal counsel regarding a particular matter or advice from another professional.

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Six CPAs charged with stealing PCAOB information

Posted on January 22, 2018 at 2:45 PM

The DOJ and SEC charged six accountants with misappropriating and using confidential information about the PCAOB's planned inspections of KPMG. The six include three former officials at the Public Company Accounting Oversight Board or PCAOB and three former partners at KPMG LLP.

The indictment alleged that:

• the KPMG executives recruited officials at the PCAOB who had stolen confidential information about the PCAOB’s plans to audit the firm;

• the former P...

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Reminder: TRACE for Treasuries Reporting Changes

Posted on January 22, 2018 at 8:25 AM

FINRA will implement changes to the TRACE for Treasuries (U.S. Treasuries) trade reporting retention period on January 22, 2018. Currently, trade reports for U.S. Treasuries transactions are held on a rolling 2-day period (T-1). Following the change, trade reports for U.S. Treasuries transactions will be retained on a rolling 3-day period (T-2).

Starting January 22, firms will be able to perform TRACE for Treasuries trade cancellations and corrections on transactions during the T-2 rete...

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SEC Issues FAQs on Liquidity Risk Management Program Rule

Posted on January 18, 2018 at 4:20 PM

The SEC's Division of Investment Management released answers to 15 questions regarding its October 2016 liquidity risk management program rule. The SEC staff’s guidance focused on sub-advisers and In-Kind exchange-traded funds (“ETFs” - see definition in the rule).

In sum, the FAQs provide:

  • A fund may delegate specific responsibilities under a fund’s liquidity program, including serving as the program’s administrator, to a sub-adviser. 
  • ...
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FTC Issues Guidance on Charity Scams

Posted on January 16, 2018 at 8:10 PM

Following the FTC's settlement with InfoCision, an Ohio-based for-profit telemarketer that solicits contributions on behalf of well-known charities, it issued a notice (link below) to provide guidance dealing with charity fundraisers and its Telemarketing Sales Rule. Importantly, the notice provides that telemarketers should be truthful about why they’re calling so consumers can make informed choices about whether to engage with the telemarketer and contribute to the charity

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SEC Requests Comments on Form PF

Posted on January 16, 2018 at 7:15 PM

The SEC is requesting comment on the Form PF ("Reporting Form for Investment Advisers to Private Funds and Certain Commodity Pool Operators and Commodity Trading Advisors"). The form is required for all private fund advisers with at least $150 million in private assets under management and intended to aid the Financial Stability Oversight Council in monitoring systemic risk, and in allocating its regulatory tools for nonbank financial companies. The attached presentation sets out more inform...

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Free Guide from IT Governance on 12 cyber security questions to ask your CISO

Posted on January 16, 2018 at 9:05 AM

IT Governance issued a free guide on what CEOs and board of directors need to know about their respective cybersecurity controls. Considering regulatory pressures (most notably the EU General Data Protection Regulation (GDPR), and increasing reliance on technology and big data, organizations have more pressure now than ever to reduce their cyber risks.

Effective cybersecurity controls and more importantly overall program are critical to any organization. To help the board play an esse...

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FTC Staff Perspective Recaps Workshop Examining Privacy, Security Issues Related to Connected Cars

Posted on January 15, 2018 at 9:50 AM

The Federal Trade Commission’s Bureau of Consumer Protection detailed the key takeaways from the June 28, 2017, workshop the Commission co-hosted with the National Highway Traffic Safety Administration focused on privacy and security issues related to connected cars.

The notice summarizes important themes from the discussion by panelists at the full-day workshop. This included various issues related to connected and automated vehicles that collect data. They include:


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FORM ADV Changes - Summary

Posted on January 12, 2018 at 9:50 AM

I came across the following handy checklist published by the Investment Advisers Association that should be considered by investment advisers when they need to update their Form ADV.

As a reminder, highlights of the amendments to Form ADV include the following:

 Umbrella Registration for Private Fund Managers

 Separately Managed Accounts

 Other: The revised Form also now requires new or additional information regarding (among others):


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FINRA Announces Updates of the Interpretations of Financial and Operational Rules

Posted on January 10, 2018 at 7:35 PM

FINRA updated its interpretations in the Interpretations of Financial and Operational Rules per the advice of SEC staff. The updated interpretations relate to amendments that the SEC adopted to Securities Exchange Act (SEA) Rule 15c6-1 about the standard settlement cycle.

These updates follow the March 2017 changes adopted by the SEC regarding SEA Rule 15c6-1 regarding the standard settlement cycle. FINRA is updating interpretations in the Interpretations of Financial and Operational Ru...

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FINRA Requests Comment on Proposed Amendments to FINRA Rule 4521 and New Supplemental Liquidity Schedule

Posted on January 9, 2018 at 8:45 PM

FINRA is seeking comment on proposed amendments to FINRA Rule 4521 (Notifications, Questionnaires and Reports). These changes would require specified member firms to notify FINRA no more than 48 hours after specified events that may signal an adverse change in liquidity risk.

Additional changes include a proposed new Supplemental Liquidity Schedule (SLS). These requirements provide:

• member firms with the largest customer and counterparty exposures would file as a suppleme...

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