The Securities and Exchange Commission announced charges against five investment advisers for failing to comply with requirements related to the safekeeping of client assets.
Three of the firms were also charged with failing to timely update SEC disclosures regarding audits of their private fund clients’ financial statements. All five advisory firms have agreed to settle the SEC’s charges and to pay more than $500,000 in combined penalties.
The advisory firms are Lloyd George Management (HK) Limited; Bluestone Capital Management LLC; The Eideard Group, LLC; Disruptive Technology Advisers LLC and Apex Financial Advisors Inc.
According to the SEC’s orders, the five firms failed to do one or more of the following: have audits performed; deliver audited financials to investors in a timely manner; and/or ensure a qualified custodian maintained client assets. In addition, according to the SEC’s orders, two of the firms failed to promptly file amended Forms ADV to reflect they had received audited financial statements, and one of the firms did not properly describe the status of its financial statement audits for multiple years when filing its Form ADV.
“The Custody Rule and the associated Form ADV reporting obligations are core to investor protection,” said Andrew Dean, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “We will continue to ensure that private fund advisers meet their obligations to secure client assets.”
Without admitting or denying the findings, the firms agreed to be censured, to cease and desist from violating the respective charged provisions, and to pay civil penalties ranging from $50,000 to $225,000.
This is the second set of cases that the Commission has brought as part of a targeted sweep concerning violations of the Investment Advisers Act’s Custody Rule and Form ADV requirements by private fund advisers after charging nine advisory firms in September 2022.
Following two months of year-over-year declines, home prices rose in August (+0.7%) as the number of homes on the market decreased for the second month in a row, down -7.9% year-over-year, according to the Realtor.com® August Monthly Housing Trends Report.
Active inventory remained -47.8% below typical 2017 to 2019 levels, although an unseasonable increase in newly listed homes from July to August (+3.5%) this year provides more options for home shoppers as the fall buying season approaches.
“While the uptick in new listings is good news for home shoppers, inventory remains persistently low, even with record-high mortgage rates putting a damper on demand,” said Danielle Hale, Chief Economist for Realtor.com®. “The inventory crunch continues to put upward pressure on home prices, amplifying affordability concerns and shutting some potential buyers out of the market. However, we anticipate mortgage rates will gradually ease through the end of the year and, despite this month’s bump in home prices, we’ll be unlikely to see a new price peak this year.”
What it means for homebuyers, sellers, and the housing market Although home sellers were less active in August compared to last year, the increase in newly listed homes for sale from July to August creates a nice boost for shoppers heading into fall, which is typically the best time to buy a home. Homeowners who have been on the fence about selling will likely find eager buyers looking for fresh listings.
“As fall buying activity heats up, the newly available homes for sale aren’t likely to remain on the market long, so sellers and hopeful homebuyers will need to be prepared to move quickly,” said Realtor.com® Executive News Editor Clare Trapasso. “Home shoppers can save searches on Realtor.com® to receive real-time alerts, receive mortgage pre-approvals, and pore over their budgets to determine what they can realistically afford with today’s higher mortgage rates.”
Affordability remains a significant concern. Although sales of new homes are on the rise, construction activity isn’t sufficiently robust to offset the inventory shortage and ease prices, which are up nearly 38% from August 2019 levels. Additionally, elevated mortgage rates have raised the monthly financing cost of the average home by about $417, up 21.7% from August 2022. This greatly exceeds both wage growth (4.4%) and inflation (3.2%).
Newly listed homes improve from July, but inventory crunch continues While the market saw an unusual bump in newly listed homes for sale between July and August this year, the overall number of homes actively for sale shrank for the second consecutive month, reversing the consistent growth trajectory seen since April 2022. Some of this drop can be attributed to an off-season surge in inventory during a market slowdown last summer. Although active inventory still remains below typical pre-pandemic levels seen between 2017 and 2019, the modest rise in new homes listed for sale this summer could give buyers grappling with affordability issues more options.
As inventory shrinks, homes in several large markets sell faster compared to last year The time homes spend on the market is approaching last year’s quicker figures, with buyers again vying for fewer available options than the prior year in most parts of the country. Should this pattern continue, by the coming month homes in every region except the South are likely to sell faster than they did during the same period last year.
Photo courtesyHéctor Grisi, CEO of Banco Santander, y Ana Botín, President.
Santander has been named the Most Innovative Bank in the world by The Banker. The magazine has given the bank its highest recognition at their Innovation in Digital Banking Awards because of the bank’s successful deployment of Gravity – the bank’s home-grown digital cloud-native core banking platform, which is being implemented worldwide to help the bank become a fully digital company. The Banker describes Gravity as a “massive and ambitious project”.
“Santander is the first major bank in the world with in-house software that digitalizes core banking, which is the most critical part of a bank’s IT infrastructure and where the main financial transactions, such as money transfers, deposits or loans are processed, and has already migrated more than 90% of its IT infrastructure to the cloud,” according to the firm’s statement.
This transformation is allowing easier and faster access to data, more simplicity and faster time-to market, making it possible to deliver new capabilities for customers in hours, instead of days or weeks, and more frequent app updates. It also helps the bank improve greatly its customer experience, products and services, and drive value using real-time analytics, the memo added.
This change will also bring significant efficiencies through cutting-edge end-to-end automation and other savings.
Ana Botín, Banco Santander executive chair, said: “Innovation is at the heart of our transformation, helping us serve customers better while delivering profitable growth and value creation. Gravity, and many other examples across the group, are testament to this. World-class innovation is only possible with top talent, so huge congratulations to all the Santander Group colleagues building these global solutions as a team. We are extremely grateful to the Banker magazine for this recognition.”
Santander’s core banking digital journey started in 2022 and will be completed between the end of 2024 and the first half of 2025. The transition has already been completed successfully in several businesses in UK and Chile without any service interruption, and is also well advanced in Brazil. Atthe completion of the programme, more than 1 trillion technical executions will be managed every year by the Gravity platform within Santander’s systems.
Gravity allows parallel processing, meaning the bank can simultaneously run workloads on its existing core banking mainframe and on the cloud, allowing it to perform real-time testing with no disruption to its businesses. Once satisfied with the stability and performance, the bank can then transition from the mainframe system to the cloud.
In October 2022, Google Cloud announced that it would be commercializing a service to help other companies transition from mainframe to cloud called Dual Run, which was developed on top of Santander’s Gravity software.
Santander’s successful cloud-native core banking platform is built upon world-class capabilities thanks to the knowledge transfer of a large team of IT professionals, some of whom created the legacy system 20 years ago and are now moving it to the cloud, as well as young developers and engineers. This gives Santander’s 16,500 software developers and engineers a modern, high-performing environment to create customer-centric applications and increase the bank’s ability to attract top talent. Santander has also reduced the bank’s energy consumption from its IT infrastructure by 70%, contributing to its responsible banking targets.
As part of Santander’s innovation initiatives, the bank is also in the middle of a transformation to bring its 164 million customers onto a common operating model supported by a cutting-edge technology platform. This project, named One Transformation, is based on proven group operating models and proprietary technology like Gravity. For example, Santander Portugal has taken most of its operational activities out of its branches, freeing up branch employees so that they can spend more time supporting customers and on commercial activities, and Openbank has implemented process automation and made every product available digitally end to end, with simple products. The bank is now implementing One Transformation in the US, Spain and Mexico.
61 percent of US companies surveyed expect ESG backlash to continue or increase over the next two years, according to a report issued by The Conference Board.
The report recommends that corporate boards and management view backlash as an opportunity to clarify their ESG strategy and communications.
The Conference Board also found that most companies are staying the course when it comes to their ESG commitments. Of the firms affected by backlash, just 11% are changing the substance of their ESG programs, while a majority are focusing more on the link between ESG and core business strategy. And nearly half are changing terminology to use terms such as “sustainability.”
“ESG backlash is an umbrella term that encompasses a range of positions from healthy skepticism to philosophical opposition to various forms of opportunism,” said Paul Washington, Executive Director of The Conference Board ESG Center. “While backlash is often fueled by people’s emotions, companies should respond objectively.
The most effective response is to ensure the company’s ESG positions align with company’s core business strategy, are supported by empirical data, and serve the long-term welfare of the company, its stakeholders, and society.”
These insights and others are featured in a new report, How Companies Can Address ESG Backlash, developed by The Conference Board in collaboration with the global CEO advisory firm Teneo.
The findings come from 1) a roundtable by The Conference Board that brought together more than 200 corporate leaders, and 2) a survey of 125 corporations, about half of which have annual revenue of over $10 billion.
U.S. Bank announced several updates to previously shared leadership changes that will be effective Sept. 1.
“Our succession planning efforts have enabled us to move quickly and prudently to ensure continuity of leadership and service as senior executives have made personal and professional choices in their careers,” said Andy Cecere, chairman, president and CEO of U.S. Bank.
Terrance Robert Dolan, currently vice chair and chief financial officer, and John Stern, senior executive vice president and head of Finance, will assume new titles effective Sept. 1.
Dolan will serve as vice chair and chief administration officer overseeing the company’s combined Chief Administration Office. Stern will become senior executive vice president and chief financial officer.
The company had indicated earlier this year that these promotions were expected this fall, and both leaders have been effectively prepared for their new roles. Dolan will continue to report to Cecere, with Stern reporting to Dolan.
At the same time, Jeff von Gillern, vice chair of Technology and Operations Services, will retire on Sept. 1.
The company previously announced his intention to retire last November, and he has been gracious to stay on board to guide the company through the systems integration related to its MUFG Union Bank acquisition.
Von Gillern will remain on hand as an advisor to the CEO through the end of the year, but his remaining day-to-day responsibilities will shift to Dilip Venkatachari effective the first day of September. Venkatachari, senior executive vice president and chief information and technology officer, will then report directly to Cecere and serve as an executive officer of the company.
Photo courtesyLars Jensen, Managing Partner de FDS.
Fund Distribution Services (FDS), specializing in both institutional and retail channels in US Offshore and Latin America has reached an agreement to represent Aegon Asset Management in the US Offshore market.
“Our partnership with Aegon AM allows us to increase the breadth of solutions that we offer our clients. Their history and experience provide additional strength and wisdom within their strategies as solid building blocks within portfolios,” said Lars Jensen, Managing Partner FDS.
Aegon Asset Management is an active global investor with approximately 375 investment professionals managing and advising USD 321 billion as of June 30, 2023, for a global client base of pension plans, public funds, insurance companies, banks, wealth managers, family offices and foundations.
“We are excited to partner with FDS to increase our presence and assets in the US Offshore market. FDS offers an experienced team and strong relationships with platforms and financial advisors in this channel,” added Mark Johnson Managing Director, Aegon Asset Management.
Investors Trust celebrated the grand opening and ribbon cutting ceremony of its new office in Kuala Lumpur.
On Thursday, August 24, from 19:00 to 22:00, Investors Trust hosted a grand opening party that offered a delightful experience for all in attendance. This was a momentous event as it marked the grand opening of their new office in Kuala Lumpur.
This celebration gave guests the unique opportunity to explore the ins and outs of the new office while enjoying a captivating atmosphere.
The Investors Trustmanagement team was also present, sharing interesting conversations and fostering contacts with the guests. The event was attended by more than 140 people, including distinguished guests and representatives of the local media, who came together to celebrate this remarkable milestone in Investors Trust’s trajectory.
This new office is part of the restructuring of Investors Trust’s operations in the region and will serve as the new sales hub in Asia. The relocation reflects the company’s commitment and efforts to deliver top-rated service in the region, especially Malaysia, where it has had a growing presence for over 10 years.
The opening of this office is a strategic decision that represents the company’s preference to concentrate their sales and operations functions in one location where Investors Trust is fully licensed in order to provide optimal service and expand its reach across the region.
“The relocation of our Asia hub continues our longstanding commitment to the region and further expands our presence in Malaysia where ITA Asia Ltd is registered as a licensed Insurer by the Labuan Financial Services Authority,” David Knights, Head of Distribution Asia at Investors Trust.
The office is in the new state-of-the-art Exchange 106 building which is located in the new business district of Tun Razak Exchange. The relocation will provide an attractive and modern working environment for their Asia sales team along with an impressive location for Investors Trust’s business partners from around the world.
Robeco has published the second edition of its comprehensive manual, the Big Book of Sustainable Investing (SI). This publication provides insights into how investors can approach SI, and details Robeco’s sustainable practices. It offers solutions to navigate complex sustainability topics, including the net-zero transition and the UN Sustainable Development Goals (SDGs).
The first Big Book of SI was published five years ago and became one of Robeco’s most downloaded publications, establishing its significance. Over the last few years, the world has experienced major health, geopolitical, and climate-related events. These events have illustrated how quickly risks can materialize and spread with serious impacts on supply chains and economies. “We have witnessed the interconnectedness of environmental and social issues and this has created greater interest, and a more intense focus on sustainability in investments”, the. firm said.
Recent studies reveal that humanity is consuming natural resources 1.75 times faster than the planet’s ecosystems can regenerate. “We cannot change the past, however, there is an opportunity to chart a different course to avoid catastrophic outcomes in the future. The Big Book of SI explores three global challenges – climate change, biodiversity loss, and human rights – to illustrate the need for integrating sustainability into investment decisions. Sustainable Investing contributes to mitigating risks, generating investment returns, and driving positive change through the alignment of portfolios with real-world impact”, Robeco added.
Worldwide, approximately USD 35 trillion is invested sustainably across five major markets. SI growth is expected to continue because it is seen as being financially relevant and with a growing client base and increasing societal expectations, SI investing continues to gather regulatory support.
Mark van der Kroft, Chief Investment Officer Robeco:“Sustainability has been integral to Robeco’s investment philosophy for decades. We firmly believe in safeguarding economic, environmental, and social assets to ensure a healthy planet where people can thrive for generations to come. As SI pioneers and investment engineers, we strive to lead the way in uncovering new opportunities for investors, and promoting a sustainable future for both business and society. This commitment as well as the support to our clients wherever they are on their sustainability journey, is reflected in our second Big Book of SI.”
The 135-page book, filled with research-driven insights, is now available on Robeco’s website.
Global Predictions, powering the next generation of economic decision-making, today announced that PortfolioPilot is officially a Registered Investment Advisor regulated by the U.S. Security & Exchange Commission (SEC).
“Securing SEC registration for our AI financial advisor marks a huge milestone for the company and instills a new level of user confidence in our platform,” said Alexander Harmsen, CEO of Global Predictions. “We are committed to empowering self-directed investors to make smarter investment decisions by building hedge fund caliber investment solutions and making them accessible to everyone.”
The company has gone through reviews and implemented a rigorous compliance program with ongoing audits in accordance with the SEC’s stringent compliance guidelines. This compliance, the heightened level of oversight, and fiduciary responsibility strengthen PortfolioPilot’s ability to be a trusted companion for self-directed investors looking for personalized, automated recommendations.
PortfolioPilot distinguishes itself from human financial advisors with its ability to provide genuinely personalized investment advice for self-directed investors. Leveraging AI and the company’s Economic Insight Engine, a proprietary modeling and forecasting system, the platform analyzes the user’s entire net worth to provide automated recommendations, portfolio insights, and an AI assessment to identify critical areas of improvement and highlight economic factors most impacting their portfolio.
PortfolioPilot introduces three new features: Portfolio Overhaul is a one-click, automated, and comprehensive process that reviews and adjusts the user’s existing portfolio based on various factors like risk tolerance level, investment goals, and macroeconomic conditions.
In addition, Fee Optimization provides a clear picture of the annual fees, including expense ratios, transaction costs, and management fees, to help understand the cost of impact on investment returns. In addition, offers cost-saving recommendations, including lower-fee alternatives with similar risk/return and strategies to reduce transaction costs.
Third and finally, AI Equity Search – Assists users in discovering investment opportunities in the market to generate alpha. Based on the user’s search query, the tool will analyze vast amounts of data and generate a shortlist of stocks or ETFs that meet the criteria.
The Securities and Exchange Commission adopted new rules and rule amendments to enhance the regulation of private fund advisers and update the existing compliance rule that applies to all investment advisers. The new rules and amendments are designed to protect private fund investors by increasing transparency, competition, and efficiency in the private funds market, the statement said.
“Private funds and their advisers play an important role in nearly every sector of the capital markets,” said SEC Chair Gary Gensler. “By enhancing advisers’ transparency and integrity, we will help promote greater competition and thereby efficiency. Consistent with our mission and Congressional mandate, we advance today’s rules on behalf of all investors — big or small, institutional or retail, sophisticated or not.”
To enhance transparency, the final rules will require private fund advisers registered with the Commission to provide investors with quarterly statements detailing certain information regarding fund fees, expenses, and performance, the SEC stated.
In addition, the final rules will require a private fund adviser registered with the Commission to obtain and distribute to investors an annual financial statement audit of each private fund it advises and, in connection with an adviser-led secondary transaction, a fairness opinion or valuation opinion.
To better protect investors, the final rules will prohibit all private fund advisers from providing investors with preferential treatment regarding redemptions and information if such treatment would have a material, negative effect on other investors. In all other cases of preferential treatment, the Commission adopted a disclosure-based exception to the proposed prohibition, including a requirement to provide certain specified disclosure regarding preferential terms to all current and prospective investors.
In addition, the final rules will restrict certain other private fund adviser activity that is contrary to the public interest and the protection of investors. Advisers generally will not be prohibited from engaging in certain restricted activities, so long as they provide appropriate specified disclosure and, in some cases, obtain investor consent. The final rules, however, will not permit an adviser to charge or allocate to the private fund certain investigation costs where there is a sanction for a violation of the Investment Advisers Act of 1940 or its rules.
To avoid requiring advisers and investors to renegotiate governing agreements for existing funds, the Commission adopted legacy status provisions applicable to certain of the restricted activities and preferential treatment provisions. Such legacy status will apply to those governing agreements entered into in writing prior to the compliance date and with respect to funds that have commenced operations as of the compliance date.
