More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
Senators Daniel Akaka (D-Hawaii) and Robert Menendez (D-New Jersey) plan to introduce on Thursday, May 6, their amendment to Senator Chris Dodd's financial services reform bill requiring brokers to adhere to a fiduciary duty
The expected introduction, confirmed by two industry sources with knowledge of the Senators' plans, came as that body continued debating the financial services reform bill on May 6, with the main focus centering on the Consumer Financial Protection Agency. Since the Senate began debating the bill on May 3, 100 amendments have been introduced but only two have been debated.
Senate Banking Committee Chairman Christopher Dodd (D-Connecticut), said in his speech on the Senate floor on May 6 that the legislation "before the Senate creates an independent consumer protection bureau. That word--independent--is important. We have seen that when an agency has consumer protection added to a portfolio already stocked with other objectives, consumer protection falls by the wayside. We know this to be true, because there are currently seven agencies tasked with consumer protection, not one of which did the job to anyone's satisfaction in the lead up to the crisis."
Dodd went on to detail how the consumer agency, under the legislation, would "have an independent director, appointed by the President and confirmed by the Senate. It will have a dedicated and independent budget, paid by the Federal Reserve Board. It will have a new Office of Financial Literacy to ensure that consumers are able to understand the products and services they're being offered, and a national toll-free consumer complaint hotline so that Americans have somewhere to go when they need to report a problem. And...it will be empowered to write consumer protection rules governing any institution--whether it's a bank or a payday lender--that offers consumer financial services or products."