More On Legal & Compliancefrom The Advisor's Professional Library
- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
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.