Last month, FINRA proposed Rule 5123 which, if adopted by the SEC, would have a huge impact on broker-dealers that offer or sell any security conducted in reliance on an exemption from registration under the Securities Act (i.e., a private placement), or participate in the preparation of a PPM, term sheet or other disclosure document for a private placement.

In September of 2010, the Californialegislature passed AB 1743 to supervise “External Managers” and require “Placement Agents” to register as lobbyists. Generally speaking, “External Managers” are defined as a person or entity who is retained or seeking to be retained by a state public retirement system in California to manage a portfolio of assets for compensation, and a “Placement Agent” is an individual or entity hired or retained by an external manager who acts as a finder, solicitor or marketer to a public retirement system or pension fund in California. Placement agents, therefore, promote external management services to California state pension funds.

The North American Securities Administrators Association (“NASAA”) recently released a set of examination findings which identify the common compliance deficiencies for state registered investment advisers.