More On Legal & Compliancefrom The Advisor's Professional Library
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
- 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 Financial Industry Regulatory Authority (FINRA) will assume surveillance and enforcement functions for NYSE Euronext's three U.S. equities and options markets in an agreement announced Monday, June 14. The agreement is effective immediately.
Under the arrangement, which was announced earlier this year, FINRA will perform market regulatory functions for the New York Stock Exchange, NYSE Arca and NYSE Amex. Prior to the agreement, these functions were conducted by NYSE Euronext's NYSE Regulation subsidiary.
NYSE Euronext joins a bevy of exchanges for which FINRA currently provides regulatory services: NASDAQ Stock Market, NASDAQ Options Market, NASDAQ OMX Philadelphia, NASDAQ OMX Boston, The BATS Exchange and The International Securities Exchange.
"This agreement is a significant step in addressing the fragmented trading environment, which has eroded the ability of regulators to get a complete picture of market activity," FINRA's chairman and chief executive Richard Ketchum said in the announcement. "It will allow FINRA to better capture and analyze data that can help us detect problematic trading activity across multiple markets and financial products. This more holistic, unified approach to regulating trading goes a long way toward strengthening our ability to protect investors-and has multiple benefits for the markets."
NYSE Euronext, through NYSE Regulation, remains ultimately responsible for overseeing FINRA's performance of regulatory services for the NYSE markets, the announcement said. It also retains staff associated with rule interpretations and oversight of listed issuers' compliance with the NYSE markets' financial and corporate-governance standards. The agreement involves some 225 staff members, most of whom are being transferred to FINRA.
Michael S. Fischer (email@example.com) is a New York-based financial writer and editor and a frequent contributor to WealthManagerWeb.com.