More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
The Securities and Exchange Commission (SEC) will meet on Friday to vote on implementing several proposed rules under Dodd-Frank—to require hedge funds and other private funds to register with the commission; increasing the threshold for the SEC’s oversight of advisors to $100 million in assets from $25 million (resulting in the switching of nearly 4,000 advisors to state oversight); and proposed rules on new data warehouses.
The Commission will also consider whether to propose rules that would implement new exemptions from the registration requirements of the Investment Advisers Act of 1940 for advisors to venture capital funds and advisors with less than $150 million in private fund assets under management in the United States. A loophole currently exists in Dodd-Frank which exempts private fund firms with from $100 million to $150 million from registering with the SEC.
The SEC meeting will be the last one for Andrew “Buddy” Donohue, director of the SEC’s Division of Investment Management, as his last day is reportedly Nov. 19. A successor has not been named for Donohue.