More On Legal & Compliancefrom The Advisor's Professional Library
- The New and Improved Form ADV Whether an RIA is describing its investment strategy in advertisements or in the new Form ADV Part 2, it is important the firm articulates material risks faced by advisory clients and avoids language that might be construed as a guarantee.
- The Custody Rule and its Ramifications When an RIA takes custody of a clients funds or securities, risk to that individual increases dramatically. Rule 206(4)-2 under the Investment Advisers Act (better known as the Custody Rule), was passed to protect clients from unscrupulous investors.
Investment Company Institute President and CEO Paul Schott Stevens, in testimony before the U.S. Senate Banking Committee, has outlined ICI's detailed proposal on how to reform the U.S. financial regulatory system, including specific recommendations to provide greater protections for investors and the marketplace.
These proposals include the creation or designation of a "systemic risk regulator" and the establishment of a new "capital markets regulator." The former would be charged with monitoring and mitigating risks across the financial system at large, and the latter would encompass the combined functions of the SEC and the Commodity Futures Trading Commission and set regulatory standards for registered investment companies, including money market funds.
Finally, Stevens provided an update on money market funds and reviewed the critical role they play in the U.S. economy, with about $3.9 trillion in assets currently. Stevens says ICI's Money Market Working Group, formed last November, "will [soon] issue a strong and comprehensive set of recommendations to enhance the way money market funds operate."