More On Legal & Compliancefrom The Advisor's Professional Library
- Risk-Based Oversight of Investment Advisors Even if the SEC had a larger budget and more resources, it is doubtful that the Commission would have the resources to regularly examine all RIAs. Therefore, the SEC is likely to continue relying on risk-based oversight to fulfill its mission of protecting investors.
- 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.
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.