More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Dealings With Qualified Clients and Accredited Investors Depending upon an RIAs business model and investment strategies, it may be important to identify “qualified clients” and “accredited investors.” The Dodd-Frank Act authorized the SEC to change which clients are defined by those terms.
Sen. Tim Johnson, D-S.D., chairman of the Senate Banking, Housing and Urban Affairs Committee, says that among his Committee’s top oversight issues for the 112th Congress will be: the Dodd-Frank Act; the Securities and Exchange Commission’s (SEC) funding, the SEC’s “effectiveness”, and the agency’s whistleblower program; housing finance reform—including restructuring the GSEs; the state of the municipal securities market; credit ratings agencies; the Consumer Financial Protection Bureau; and the new Federal Insurance Office.
Those issues and more--including derivatives and the Volcker rule--were listed in the Senate Banking Committee’s agenda for the new Congress, which Johnson distributed to his staff in early February.
In his Committee agenda, Johnson says that he’ll ensure “effective and timely implementation of the Dodd-Frank Act” while also making sure “the letter and spirit of the law” are being implemented by regulators; that public comment on rules is being appropriately solicited and considered; the new law is being enforced; “legitimate concerns” regarding the Act are considered; and that regulators have “adequate resources to perform their work and are using the resources efficiently.”
As for housing finance reform, Johnson said that the Committee will start the process of examining the “numerous questions arising from the need to restructure the housing finance system, including the government-sponsored enterprises (GSEs).” The statutory and regulatory requirements of the Dodd-Frank Act “will begin and inform discussions regarding securitization, risk retention, the definition of a Qualified Residential Mortgage (QRM) and restrictions on mortgage lending,” he said. The Obama Administration is due to release on Friday its white paper on Fannie Mae and Freddie Mac.
The CFPB’s “set-up and administration” will also be on Johnson’s radar. Elizabeth Warren, chief architect for the CFPB recently sent a response letter to Rep. Randy Neugebauer, R-Texas, Chairman of the House Financial Services Committee’s Subcommittee on Oversight and Investigations, in response to a series of questions he posed to her regarding the CFPB. Warren told Neugebauer that as currently envisioned, the CFPB will have six divisions: Consumer engagement and education; supervision and enforcement; research, markets and regulation; Office of General Counsel; the external affairs office; and the Chief Operating Officer division.
Johnson also said that as the Committee conducts oversight of the Dodd-Frank Act, issues affecting insurance regulations “will remain a priority.” As the new Federal Insurance Office (FIO) is “stood up,” he said, “the Committee will monitor its work.” In particular, he noted, the first report from the FIO on the insurance industry is due this year, “which will provide the Committee useful information as it considers any legislation at the federal level.”