From the October 2010 issue of Investment Advisor • Subscribe!

About Those Other SEC Studies ...

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More On Legal & Compliance

from The Advisor's Professional Library
  • Where Are We Headed? The ultimate compliance goal is to help ensure that everyone associated with an advisory firm acts ethically at all times.  Advisors and RIAs should do the right thing, even when regulators are not looking over their shoulders.
  • Using Solicitors to Attract Clients Rule 206(4)-3 under the Investment Advisors Act establishes requirements governing cash payments to solicitors. The rule permits payment of cash referral fees to individuals and companies recommending clients to an RIA, but requires four conditions are first satisfied.

Among the litany of studies (close to 17 of them, along with 95 rulemakings) that the SEC is charged with conducting under the Dodd-Frank Act, the advisory industry will be greatly affected by about five of them.

One of those five, the fiduciary study, is already under way with the SEC required to submit its report to Congress in January. Dodd-Frank also stipulated that the Government Accountability Office's (GAO) study of the regulation of the financial planning industry is to be submitted to Congress 180 days after the signing of Dodd-Frank into law, which means lawmakers should have the GAO study by late January.

Financial Planner Study (GAO): To examine the effectiveness of state and federal regulation of financial planners.

Study Concerning Improving Access to Registration Information for BDs and RIAs (SEC): To develop recommendations about improving investor access to registration information on BDs, RIAs, and associated persons of these entities.

Review of BD Auditors (PCAOB): To examine financial audits of broker-dealers.

Investment Adviser Examination Study (SEC): To examine whether an SRO should be designated to oversee RIAs.

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