More On Legal & Compliancefrom The Advisor's Professional Library
- Registration Requirements for Investment Advisor Representatives (IARs) When individuals launch an advisory firm, they must avoid marketing themselves or the firm as investment advisors before they are properly approved and registered. Otherwise, they are subject to severe penalties.
- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
The unprecedented has become almost routine. One day after saying it would set up a facility to buy commercial paper directly from corporate issuers, the Federal Reserve early on October 8 issued a joint statement with five other central banks around the word that it would reduce interest rates. The banks include the European Central Bank, the Bank of England, and the Canadian, Swedish, and Swiss national banks.
Later in the day, the Chinese national bank also cut its benchmark lending and deposit rates by 27 basis points, while the Bank of Japan expressed its support of the actions.
The statement from the Fed noted that "inflationary pressures have started to moderate in a number of countries," and that "inflation expectations are diminishing." The Federal Open Market Committee thus decided--three weeks ahead of its next scheduled meeting--to lower its target for the federal funds rate by 50 basis points, to 1.5%. The other central banks also cut their rates by 50 bps.
The FOMC cited economic data suggesting that "the pace of economic activity has slowed markedly in recent months," and that the "intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit." The committee acknowledged that "inflation has been high," but voiced its belief that a decline in prices for energy and other commodities and "weaker prospects for economic activity have reduced the upside risks to inflation."
The Fed Board of Governors also cut the discount rate by 50 bps to 1.75%.