From the June 2010 issue of Investment Advisor • Subscribe!

The Regulators Never Sleep

More On Legal & Compliance

from The Advisor's Professional Library
  • The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.
  • Scope of the Fiduciary Duty Owed by Investment Advisors A fiduciary obligation goes beyond the suitability standard typically owed by registered representatives of broker-dealer firms to clients. The relationship is built on the premise that the advisor will always do the right thing for the person or entity receiving advice.

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) announced May 10 that the two agencies have formed a joint committee that will address emerging regulatory issues. The Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues was one of the 20 recommendations included in the agencies' harmonization report issued last year.

The two agencies say that the joint Committee will develop recommendations on emerging and ongoing issues relating to both agencies. The first item on the committee's agenda was conducting a review of the market events of Thursday, May 6, in which the Dow Jones dropped 1,000 points.

The SEC and CFTC say that the Committee's charter provides for a broad scope of interest, including:

o Identifying of emerging regulatory risks.

o Assessing and quantifying the impact of such risks and their implications for investors and market participants.

o Furthering the SEC's and CFTC's efforts on regulatory harmonization.

Chairman Mary Schapiro of the SEC and Chairman Gary Gensler will serve as co-chairs of the Joint Committee.

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