More On Legal & Compliancefrom The Advisor's Professional Library
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
- 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.
Administration and Congressional officials announced Sunday, September 28, that they had compromised on the $700 billion financial services bailout plan and would send the revised, 110-page bill to the House of Representatives on Monday, September 29, where many expect there to be significant debate before the bill is sent to the Senate. However, Congress has already delayed its much-loved pre-election adjournment, so quick action is expected.
The bill differs in significant ways from the original four-page prayer submitted by Treasury Secretary Henry Paulson. While the total size of the bailout remains as it was in the original, now the authority to purchase up to $700 billion in distressed mortgages was given in tranches: first $250 million, then an additional $100 million can be requested by the President; if he so desires, he can request the remaining $350 million, but Congress can block the request if it so desires.
The bill now also requires stricter Congressional oversight of the practice of buying and selling the debt instruments; limits the compensation of some executives at companies involved in the Treasury process; requires companies to give warrants to the government convertible to stock; creates a new kind of debt insurance; and allows the government to approve "reasonable" adjustments to mortgages it assumes. Finally, should the government not recoup the $700 billion through the sale of the mortgages it acquires, the bill requires the President to get that amount back from the industry in an unspecified manner.
Meanwhile, there were fresh signs that more banks were being hit by the credit crisis both in the U.S. and abroad. After a week that saw the government seize and sell the largest U.S. savings and loan company, Washington Mutual, the fourth largest commercial bank--Wachovia--was in talks to sell itself to either Wells Fargo or Citigroup.
The crisis was also spreading to Europe, where there was speculation that a bailout plan similar to the U.S. move might be necessary as regulators in the U.K., Belgium, Luxemborg, and The Netherlands moved to nationalize two banks that had significant exposure to bad mortgage debt: Fortis, the Belgian-Dutch bank, and Bradford & Bingley, a big U.K. mortgage lender. It would be the third British bank to fail this year, after Northern Rock and HBOS.