More On Legal & Compliancefrom The Advisor's Professional Library
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
- Differences Between State and SEC Regulation of Investment Advisors States may impose licensing or registration requirements on IARs doing business in their jurisdiction, even if the IAR works for an SEC-registered firm. States may investigate and prosecute fraud by any IAR in their jurisdiction, even if the individual works for an SEC-registered firm.
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.