{"id":5103,"date":"2011-01-13T00:00:00","date_gmt":"2011-01-13T06:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/01\/sec_extends_temporary_rule_all"},"modified":"2022-08-29T09:07:03","modified_gmt":"2022-08-29T14:07:03","slug":"sec-extends-temporary-rule-all","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/sec-extends-temporary-rule-all\/","title":{"rendered":"SEC Extends Temporary Rule Allowing Principal Trades by Investment Advisers Registered as Broker-Dealers"},"content":{"rendered":"<p>The US Securities and Exchange Commission has adopted amendments to delay the expiration date of Rule 206(3)-3T under the 1940 Investment Advisers Act. The temporary rule, which was supposed to expire on December 31, 2010, will now stay in effect until December 31, 2012.<\/p>\n<p>Rule 206(3)-3T gives investment advisers that are also broker-dealers who are registered with the SEC another way to satisfy the Advisers Act\u2019s Section 206(3) requirements when they work in a principal capacity with certain advisory clients. Section 206(3) does not allow investment advisers to effect or take part in a transaction for a client while acting either as broker for a person besides the client or as principal for its own account unless the client has been informed of the role that the adviser is playing and has given his or her consent. The SEC says it is completing its study on broker-dealers and investment advisers, per the Dodd-Frank Wall Street Reform and Consumer Protection Act mandate, and it will deliver the report to Congress by January 21.<\/p>\n<p>Under Rule 206(3)-3T, an adviser is allowed to comply with Section 206(3) of the Advisers Act by, among other things:<\/p>\n<p>\u2022 Providing written prospective disclosure about principal trade conflicts.<br \/>\n\u2022 Getting revocable written consent from the client that prospectively gives the adviser the authority to enter into principal transactions.<br \/>\n\u2022 Making certain written or oral disclosures and getting the client\u2019s consent prior to each principal transaction.<br \/>\n\u2022 Sending the client confirmation statements that disclose that the adviser notified the client that it could act in a principal capacity and it has the client\u2019s consent.<br \/>\n\u2022 Giving the client an annual report that itemizes the principal transactions.<\/p>\n<p><strong><br \/>\nRelated Web Resources:<\/strong><\/p>\n<p><a href=\"https:\/\/www.investorlawyers.com\/blog\/2010\/12\/the_new_sec_is_acting_just_lik\">The \u201cNew\u201d SEC is Acting Just Like The \u201cOld\u201d SEC by Protecting the Securities Industry from Responsibility for its Actions<\/a>, Stockbroker Fraud Blog, December 9, 2010<\/p>\n<p> <a href=\"https:\/\/www.investorlawyers.com\/blog\/sec-extends-temporary-rule-all\/#more-5103\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US Securities and Exchange Commission has adopted amendments to delay the expiration date of Rule 206(3)-3T under the 1940 Investment Advisers Act. The temporary rule, which was supposed to expire on December 31, 2010, will now stay in effect until December 31, 2012. Rule 206(3)-3T gives investment advisers that are also broker-dealers who are [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3781,3740,3761,3963],"tags":[],"class_list":["post-5103","post","type-post","status-publish","format-standard","hentry","category-investment-advisers","category-miscellaneous","category-securities-and-exchange-commis","category-securities-law-and-regulations"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>SEC Extends Temporary Rule Allowing Principal Trades by Investment Advisers Registered as Broker-Dealers &#8212; Investor Lawyers Blog &#8212; January 13, 2011<\/title>\n<meta name=\"description\" content=\"The US Securities and Exchange Commission has adopted amendments to delay the expiration date of Rule 206(3)-3T under the 1940 Investment Advisers Act. &#8212; January 13, 2011\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/sec-extends-temporary-rule-all\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"SEC Extends Temporary Rule Allowing Principal Trades by Investment Advisers Registered as Broker-Dealers &#8212; Investor Lawyers Blog &#8212; January 13, 2011\" \/>\n<meta name=\"twitter:description\" content=\"The US Securities and Exchange Commission has adopted amendments to delay the expiration date of Rule 206(3)-3T under the 1940 Investment Advisers Act. &#8212; January 13, 2011\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"SEC Extends Temporary Rule Allowing Principal Trades by Investment Advisers Registered as Broker-Dealers &#8212; 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