12 INVESTMENT ADVISOR JANUARY/FEBRUARY 2019 | ThinkAdvisor.com
an eye toward getting something passed
Noting the GDPR and California pri-
vacy rule, “a lot of forces are aligning to
make legislation possible,” Kerry said.
Meanwhile, Isabell Sawhill, senior
fellow in economic studies at Brookings,
Christen Linke Young, Fellow in USC-
Brookings Schaeffer Initiative for Health
Policy, added that with the House back
in democrats’ hands, “we can look ahead
to the first Congress since 2011 where
that body won’t be passing a bill to
repeal” the Affordable Care Act.
Washington Bureau Chief Melanie Waddell can
be reached at email@example.com.
Regulators & Advisors’ Priorities During Shutdown
While registered investment advisors must press ahead in
meeting their Form ADV filing obligations during the government shutdown, the agency’s divisions will be unable to conduct business as usual. However, state securities regulators
continued to function under regular business hours.
“Firms still can and should make all required filings (ADV or
otherwise) with the SEC,” said Gail Bernstein, the Investment
Adviser Association’s general counsel, in early January.
“I believe that all statutory and regulatory deadlines must
be kept by [SEC] registrants (or applicants),” Berstein said, as
noted in the SEC’s operations shutdown plan.
The agency’s divisions of Corporation Finance, Investment
Management, Trading and Markets, and the Office of
Compliance Inspections and Examinations “will be unable to
process filings, provide interpretive advice, issue no-action
letters or conduct any other normal Division and Office activities,” according to the plan.
As a result, “new or pending registration statements or
applications for exemptive relief will not be processed regard-
less of the status of any review of those filings.”
OCIE stated that during the shutdown, “processing of regis-
trations and all non-emergency examinations and other work
will be deferred and staff will be unavailable.”
The commission’s Division of Investment Management
also posted a notice stating that under shutdown guidelines
“you won’t be able to accelerate the effectiveness of various
investment company filings and you won’t get answers to
questions from the Division,” Bernstein notes.
The shutdown guidance as it relates to the SEC’s
Investment Adviser Registration Depository, or IARD, system
“is operated pursuant to a contract and thus will remain fully
functional and will continue to accept filings as long as funding for the contractor remains available through permitted
means,” according to the plan.
However, OCIE will be “unable to approve” advisor registration applications, and Investment Management cannot “
provide interpretive advice regarding the Advisers Act, rules or
forms, or consider applications for exemptive relief under the
Advisers Act,” the plan states.
As a result, new or pending investment advisor applications
“will not be processed,” but the IARD system will continue to
accept annual and other-than annual amendments to Form
ADV, Form ADV-W and Form ADV-E filings.
State securities regulators, however, made sure to inform
investors that they’re unaffected by the partial shutdown and
available to provide assistance.
Less than a block from the White House, Raymond James
advisor Michael Feeley is in the eye of the storm. About 90%
of his clients are federal employees and retirees.
“In general, those 50 and up have gone through this before,
are not too worried about getting back pay and have three
to six months of savings,” said Feeley, who is part of the
Goldstein Group of Raymond James.
But for younger folks in a different situation, “They are
trying to figure things out, how to make things work,” he
explained. “They may have been in these jobs for only a few
years … and are wondering, ‘What happens when I miss my
The advisor says he’s been calling federal workers who
are renters, for instance. “They tend to be younger ... and
Washington, D.C., is a high-rent area. They don’t have six months
of savings and are freaking out a bit more [than older clients].”
Commonwealth Financial advisor Katherine Liola says she
also is “in the thick of shutdown conversations.” The presi-
dent of Concentric Private Wealth of McLean, Virginia, serves
many federal employees in the area.
“Some clients highly value stability, and if they have to
tap into savings, it can cause lots of stress for those cash
reserves,” Liola said. “We are having them review the expenses and identify monthly transactions, like gym costs and
magazine subscriptions, to see what has to be paid or not.”
—Janet Levaux contributed to this report.