More On Legal & Compliancefrom The Advisor's Professional Library
- The Custody Rule and its Ramifications When an RIA takes custody of a clients funds or securities, risk to that individual increases dramatically. Rule 206(4)-2 under the Investment Advisers Act (better known as the Custody Rule), was passed to protect clients from unscrupulous investors.
- Proxy Voting RIAs are not required to vote proxies on behalf of their clients. However, when an RIA does assume responsibility for voting proxies, the firm’s policies and procedures should help to ensure that votes are cast in the best interest of clients.
Senate Democrats unveiled a new continuing resolution spending bill on Sunday evening, H.R. 3082--the Full-Year Continuing Appropriations Act, 2011--and plans to vote on the measure on Tuesday. Senate Majority Leader Harry Reid, D-Nev., invoked cloture Sunday night on the new continuing resolution that would keep the government running until March 4, 2011. Reid’s original $1.2 trillion omnibus spending bill was defeated on Dec. 16 due to lack of Republican support and included measures that would have stretched until Sept. 30, 2011.
The new continuing resolution contains no specific language regarding the Securities and Exchange Commission (SEC), which means the SEC remains under its FY 2010 budget through March 4.
Former Congressman Bill Frenzel (R-Minn.) predicted in an interview Dec. 17 that following the failure of the omnibus appropriations bill that it would leave it to the 112th Congress to address the Federal budget.
Under the original spending bill, the SEC would have gotten an increase of $205 million, or 18%, over the agency’s FY 2010 budget—putting the agency’s total budget at $1.3 billion. The boost would have helped the agency implement the scores of new rules under Dodd-Frank, and also help the agency with its oversight and enforcement duties as well as give needed funds for technology updates.
Despite the fact that the SEC was allocated more funding under Dodd-Frank, the Commission listed on its website in December its plans to defer launching a number of offices created under Dodd-Frank, like the whistleblower, credit ratings agency, investor advocacy, and municipal securities offices, due to “budget uncertainty.”
That uncertainty has been a concern of SEC Chairman Mary Schapiro since at least last November, IAA Executive Director David Tittsworth said in a Dec. 16 interview in which he discussed likely regulatory and legislative developments following passage of the compromise tax bill by the House on Dec. 16.