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.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
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."