More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Client Communication and Miscommunication RIA policies and procedures must specify what type of communications should be retained. The safest course of action is for RIAs to retain all communicationsto clients, from clients, and about client accounts. To comply with fiduciary obligations, communications must be thorough and not mislead.
In response to the voice vote today (Dec. 11) during debate on the financial services reform bill which struck down the provision that would have allowed the SEC to give FINRA inspection and rulemaking authority over a large segment of investment advisory firms, Investment Adviser Association Executive Director David Tittsworth issued a statement of approbation.
"We are pleased that the House of Representatives recognized that it would be inappropriate for FINRA - the self-regulatory organization for broker-dealers - to exercise inspection and rulemaking authority over investment advisers," said Tittsworth. He thanked his association's members for their hard work on the issue and acknowledged the efforts of the North American Securities Administrators Association, Consumer Federation of America, and other industry organizations that joined together in supporting the Cohen/Frank amendment .
"The fight, however, is far from over as FINRA will continue its lobbying efforts to extend its jurisdiction over investment advisers," Tittsworth continued. "The Senate Banking Committee is still developing its regulatory reform legislation and it appears that the regulatory reform debate will continue into 2010."