More On Legal & Compliancefrom The Advisor's Professional Library
- Best Practices for Working with Senior Investors Securities examiners deal harshly with RIAs that do not fulfill their fiduciary obligations toward senior investors, as the SEC and state securities regulators view older investors as particularly vulnerable and in need of protection.
- 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.
Today President Obama unveiled his plan to undertake the most comprehensive overhaul of the financial system since the Great Depression. Part of his plan would increase the power and authority of the Federal Reserve System. In addition to its current responsibilities, the Fed would be the regulator of bank holding companies as well as other non-bank companies that may pose systemic risk to the economy.
He would also establish a new consumer protection agency which would ban unfair practices and establish new rules for mortgage lending.
His plan would dismantle the Office of Thrift Supervision (OTS). The OTS regulates federal savings banks and federal savings and loans. The OTS is also responsible for supervising savings and loan holding companies (SLHCs) and some state-chartered institutions. It seems the Fed would inherit this.
He would require hedge funds to be regulated plus raise capital requirements for banks.
During his speech, he continually stated that his desire is to allow the private sector to grow and does not believe that the federal government should be the entity for providing employment. He believes job growth should occur in the private sector.
Although I like much of what he said, it seems clear that his plan would require a substantial increase in government employment. To provide regulation to the extent he is suggesting, there would have to be a massive, coordinated effort on the part of our government. Unless he is prepared to cut public sector jobs in other departments, government employment will have to increase substantially. Can the government operate in an efficient manner? Based on past experience, I am skeptical at best. Now that his plan is on the table, the negotiating will begin.