More On Legal & Compliancefrom The Advisor's Professional Library
- Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
The Securities and Exchange Commission published for public comment in October its Draft Strategic Plan outlining the Commission's strategic goals for fiscal years 2010 through 2015. The SEC says the draft plan surveys the forces shaping the SEC's environment and outlines over 70 initiatives designed to support its primary strategic goals. Comments on the proposal are due by November 16.
Besides strengthening the SEC's enforcement division, the strategic plan also sets out beefing up investment advisor and broker/dealer oversight. The Commission pointed to its consideration of rules designed to prevent political contributions from influencing the selection of investment advisers to the detriment of public pension plan clients, as well as rules that would provide additional safeguards to investors when an adviser has custody of client assets. The SEC says it will also "consider requiring those who provide investment advice to provide clients and prospective clients with clear, current, and more meaningful disclosure of their business practices, conflicts of interest, and backgrounds."