Welcome back to the Compliance in Context Podcast! On today’s show, we welcome back in welcome in David Scalzetti, Senior Director of Regulatory Products and Strategy at ICE, for Part II of a part of a two-part program looking at the impact of data on compliance. In this program, David will focus on how data can dramatically help firms trying to navigate new regulations, especially in areas affecting mutual funds and broker dealers. In our Headlines section, we review two recently adopted rules from the SEC that expand the definition of “broker-dealer” under the SEA. And finally, we’ll wrap up today’s show with another installment of Outtakes, where we review another significant enforcement action relating to text messaging and related messaging applications.   Show Headlines The SEC adopted two new rules under the Securities Exchange Act (Rule 3a5-4 and 3a44-2) to further define the term “as a part of a regular business.” The new rules expand the scope of firms that are required to register as broker-dealers and as government securities broker-dealers.   Interview with David Scalzetti Background on the SEC Names Rule requiring registered investment companies whose names suggest a focus in a particular type of investment to adopt a policy to invest at least 80 percent of the value of their assets in those investments (an “80 percent investment policy”). What specifically do managers of a mutual fund need to do to comply with the Names Rule? What are some of the ways firms can do to better manage the data to ensure compliance with the Names Rule? How can data assist in the portfolio management process to benchmark against how other firms are evaluating their growth, value, or sustainable investment strategies? What are some best practices firms can utilize to comply with the Names Rule or enhance its own internal controls? Background on SEC Rule 15c2-11 (Broker Dealer Quotations over a quotation medium) What can firms do to ensure compliance in difficult areas like fixed income that carry new requirements under SEC Rule 15c2-11? How can data assist in determining which fixed income securities may be eligible for the relief provided in the SEC Staff’s December 16 No-Action Letter?   Outtakes SEC Fines 16 Firms More Than $81 Million for Off-Channel Communications   Quotes 11:24 - “So the names rule dates back to the dot.com era. Really when the SEC was finding some nefarious actors were marketing themselves as technology funds because everyone was getting in on technology. Although, they may not have been investing in true technology funds. So they introduced the requirement to have an 80 percent investment policy requirement for the use of thematic or even industry-specific or even location-specific terms implied in the fund’s name, that at least 80 percent of investments need to align with that. That rule was recently amended to add two things. Explicitly add strategy terms like value and growth which were considered exempt from the 80 percent policy.” – David Scalzetti 15:18 - “So the investm...