More On Legal & Compliancefrom The Advisor's Professional Library
- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
- How to Avoid Sabotaging Your Compliance Exam There is much more to compliance examination survival than knowing all of the rules. It helps to understand why the rules were put in placeand to recognize that examiners are not the enemy.
Robert Khuzami, the Securities and Exchange Commission's newly christened Director of Enforcement, told the New York City Bar during a recent speech that a "major initiative" for the enforcement division is creating, to start, five national specialized units "dedicated to particular highly specialized and complex areas of securities law." The five specialized units will be:
o The Asset Management unit, which will focus on investment advisors, investment companies, hedge funds, and private equity funds. "These entities account for an ever increasing share of public and private investment funds, and the lines between these various vehicles blur and overlap," Khuzami said.
o The Market Abuse unit, which will focus on large-scale market abuses and complex manipulation schemes by institutional traders, market professionals, and others. "These market participants account for a high and ever increasing percentage of trading volumes, and with that comes a risk of large-scale harm," Khuzami said.
o The Structured and New Products unit, which will focus on complex derivatives and financial products, including CDS, CDOs, and securitized products. "These are huge markets, with outstanding notional amounts that at one time came close to the market capitalization of all publicly traded companies in the world," Khuzami said.
o The Foreign Corrupt Practices Act unit, which will focus on new and proactive approaches to identifying violations of the Foreign Corrupt Practice Act, which prohibits U.S. companies from bribing foreign officials for government contracts and other business.
o The Municipal Securities and Public Pensions unit. "The market for municipal securities is huge, and there is every reason to believe that the size and importance of these markets will continue to grow, as the nation's infrastructure needs increase and more and more investors seek safe investment opportunities," Khuzami said.