More On Legal & Compliancefrom The Advisor's Professional Library
- Where Are We Headed? The ultimate compliance goal is to help ensure that everyone associated with an advisory firm acts ethically at all times. Advisors and RIAs should do the right thing, even when regulators are not looking over their shoulders.
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
The SEC and Department of Labor (DOL) agreed July 29 to share information on retirement and investments in what they said was a bid to protect the $5.8 trillion in retirement assets of American workers, retirees, and their families held in employee benefit plans.
The memorandum of understanding (MOU) establishes a process for the department's Employee Benefits Security Administration and SEC staffs to share information and meet regularly to discuss matters of mutual interest, according to a release announcing the agreement. These include examination findings and trends, enforcement cases, and regulatory requirements that impact the missions of both agencies. The DOL has oversight over 401(k) and other retirement plans as well as plan participants, while the SEC oversees, among other areas, brokerages, investment advisors, and mutual funds.
"With a growing number of seniors focused on managing their own 401(k) plans, it's important to improve disclosure to give them the information they need and in a form they can use," SEC Chairman Christopher Cox said. "To accomplish this, the Department of Labor and the SEC are committed to coordinating closely on their behalf. This enhanced coordination will greatly benefit the millions of hardworking Americans who are saving and investing for their retirement as well as those who have already retired."
Both agencies will designate points of contact in their regional offices to facilitate communications among staff on enforcement and examination matters, the release states. "The agreement also will expedite the sharing of non-public information regarding investment advisors and other subjects of mutual interest between the two agencies. Additionally, DOL and SEC will cross-train staff under the agreement with the goal of enhancing each agency's understanding of the other's mission and investigative jurisdiction."