More On Legal & Compliancefrom The Advisor's Professional Library
- Differences Between State and SEC Regulation of Investment Advisors States may impose licensing or registration requirements on IARs doing business in their jurisdiction, even if the IAR works for an SEC-registered firm. States may investigate and prosecute fraud by any IAR in their jurisdiction, even if the individual works for an SEC-registered firm.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
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: