Editor's Choice for the Week of August 17, 2009

More On Legal & Compliance

from The Advisor's Professional Library
  • The Custody Rule and its Ramifications When an RIA takes custody of a client’s 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.
  • Risk-Based Oversight of Investment Advisors Even if the SEC had a larger budget and more resources, it is doubtful that the Commission would have the resources to regularly examine all RIAs. Therefore, the SEC is likely to continue relying on risk-based oversight to fulfill its mission of protecting investors.

Following two days of meetings by the Federal Reserve's Open Market Committee, on August 12 the FOMC said "Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability." See the full Fed release here, and read Forward Capital economist Richard Moody's reading of the Fed's tea leaves here. Also last week, the inflation number for July was unchanged.

The University of Chicago's Richard Thaler has written two pieces of interest--one on healthcare reform in The New York Times on August 16, the other in the Financial Times on the efficient market. Both are worth your time.

This week sees Producer Prices from the Bureau of Labor Statistics on Tuesday the 18th, along with housing starts as reported by the Census Bureau. Unemployment claims for the week ending August 15 are released Thursday morning the 20th, and on the 21st come sales of existing homes.

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