More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
The new self-regulatory organization that, once approved by the SEC, will combine NASD and NYSE's regulatory arms, will have a different name than the one announced three weeks ago, due to potential religious sensitivities to the acronym for its first choice of name, Securities Industry Regulatory Authority, or SIRA.
Because of SIRA's similarity to the Arabic term sira or sirah, used to refer to the traditional biographies of Muhammad, the NASD will use a different name for the new super SRO: Financial Industry Regulatory Authority, or FINRA, according to a July 12 letter e-mailed to firms from NASD Chairman and CEO Mary Schapiro, who will be CEO of the new organization. She called the change "simply the right thing to do."
"No matter what name the new organization operates under, FINRA is our opportunity to define the future of self-regulation, ensuring that industry input continues to be a valued component of the regulatory process," Schapiro says in the letter.
To see the letter in its entirety, go to: