From the July 2007 issue of Investment Advisor • Subscribe!

Depression-Era Financial Reforms

More On Legal & Compliance

from The Advisor's Professional Library
  • Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients’ privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
  • Dealings With Qualified Clients and Accredited Investors Depending upon an RIAs business model and investment strategies, it may be important to identify “qualified clients” and “accredited investors.”  The Dodd-Frank Act authorized the SEC to change which clients are defined by those terms.
Glass-Steagall Act of 1933: Prohibited most securities activities by commercial banks. Separated commercial banking from investment banking.

Securities Act of 1933: Regulated the issuance of securities by requiring the registration of new offerings and the full disclosure of financial information.

Securities and Exchange Act of 1934: Established the Securities and Exchange Commission with broad authority to regulate the securities industry, markets, and trading.

Public Utility Holding Company Act of 1935: Enacted to address fraud, stock manipulation, and other abuses that had led to the collapse of major utility companies.

Maloney Act of 1938: Authorized self-regulatory organizations to police the securities industry under the direction of the SEC. Led to 1939 designation of the National Association of Securities Dealers as a self-regulatory organization for the securities industry.

Investment Company Act of 1940: Established regulatory framework for mutual funds, also known as investment companies or investment trusts. Required registration with the SEC and full disclosure of relevant information.

Investment Advisers Act of 1940: Required registration of investment advisers with the SEC and imposed antifraud provisions on their activities.

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