More On Legal & Compliancefrom The Advisor's Professional Library
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
The Securities and Exchange Commission (SEC) has appointed Carlo V. di Florio as director of the agency's embattled Office of Compliance Inspections and Examinations (OCIE). OCIE, formerly headed by Lori Richards, received a lot of scrutiny from Congress and the industry for failing to detect the Bernie Madoff Ponzi scheme.
Di Florio comes to the SEC from PricewaterhouseCoopers (PwC), where he was a partner in the Financial Services Regulatory Practice and one of PwC's national leaders in corporate governance, enterprise risk management, and regulatory compliance and ethics, the SEC says. As head of OCIE, di Florio will oversee the SEC's nationwide examination programs for investment advisors, broker/dealers, mutual funds, credit rating agencies, and self-regulatory organizations among other entities.
"A strong inspections and examinations unit is instrumental to the SEC's investor protection efforts. Investors rely on our examiners to ensure that their financial professionals comply with the law," said SEC Chairman Mary Schapiro, in a statement. "Carlo brings the energy, insight, and experience necessary to ensure that we keep pace with the rapid changes in the industry and continue to build upon the reforms of the past year."
In the same statement di Florio said that he's "excited to collaborate with an outstanding team of talented and dedicated professionals across the country as we work together to strengthen our examination strategy, structure, training programs, processes and systems, while also recruiting colleagues with valuable new skill sets, including trading strategies, risk management and quantitative analytics."