More On Legal & Compliancefrom The Advisor's Professional Library
- Whistleblowers A whistleblower is any individual providing the SEC with original information related to a possible violation of federal securities law. The Dodd-Frank Act established a whistleblower program that enables the SEC to reward individuals who voluntarily provide such information.
- Client Communication and Miscommunication RIA policies and procedures must specify what type of communications should be retained. The safest course of action is for RIAs to retain all communicationsto clients, from clients, and about client accounts. To comply with fiduciary obligations, communications must be thorough and not mislead.
The SEC's Director of Investment Management, Buddy Donahue, told a packed room at the Investment Adviser Association's (IAA) compliance conference in Washington March 21 that he and Eric Surri, director of the SEC's Trading and Markets division, will deliver to SEC Chairman Christopher Cox by May 5 steps the Commission should take in light of the recent findings of the Rand report.
While he would not divulge details about the recommendations, Donahue did say it was "enormously important for us to get it right."
The Rand report, which studied the broker/dealer and investment advisor regulatory schemes, found that while investors are confused about who's a broker and who's an advisor, they are nonetheless pleased with the services they get from their financial professional of choice.
The issue of whether to put advisors and B/Ds under one set of regulations is heating up. David Tittsworth, executive director of IAA, told conference goers there could be a "complete change of advisor regulation" as there's talk now of advisors being subject to B/D regs and vice versa. "FINRA is licking its chops," he said, at the idea of "becoming the SRO for advisors." But he argued the way advisors are regulated now is "pretty good," and should remain the same.