Congress Plans SEC Oversight Hearing for July 20

Securities regulator also announces it will add three new offices to Division of Corporation Finance

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  • Regulatory Oversight of Investment Advisors Although the regulatory environment is in a state of flux, it is imperative that RIAs adhere to their compliance obligations. To ensure compliance, RIAs and IARs must fully understand what those obligations are.
  • 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 communications—to clients, from clients, and about client accounts.  To comply with fiduciary obligations, communications must be thorough and not mislead.
Just days after the Senate passed the landmark financial services reform bill on July 15, the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, chaired by Rep. Paul Kanjorski (D-Pennsylvania), plans to hold an oversight hearing Tuesday, July 20, to examine the current state of the Securities and Exchange Commission (SEC), its priorities, and the near term challenges the agency faces. SEC Chairman Mary Schapiro will be the only person testifying.

While the obvious "big challenge" the agency faces is implementing the scads of changes set out in the reform bill, the SEC is already busy setting up new offices at the securities regulator to police the market. The SEC announced on July 16 that the SEC will create three new specialized units within the agency's Division of Corporation Finance--the division that reviews public company filings--to focus on large financial institutions, asset-backed securities and other structured products, and securities offering trends.

Read more about the financial reform bill: marketplace winners and losers; impact on advisors, broker/dealers, and banks; the fiduciary standard for brokers; and the history of financial reform.

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