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.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
Rep. Randy Neugebauer, R-Texas, chairman of the Oversight and Investigations Subcommittee of the House Financial Services Committee introduced a bill on Feb. 8, H.R. 557, which would amend the Consumer Financial Protection Act of 2010 and move the Consumer Financial Protection Bureau (CFPB) into the Treasury Department.
As it stands now, the CFPB resides within the purview of the Federal Reserve Board, “without any Congressional oversight or financial accountability guiding the agency’s actions,” Neugebauer said in a statement. “Given the significant and perhaps over-regulating powers the CFPB has been given by the Obama Administration, Congress must have a say on the appropriation of taxpayer money funding this agency’s operation.”
Neugebauer went on to say that “last November’s elections sent a clear message to Washington: Government agencies that spend taxpayer money must show true transparency and must explain the intent of their processes. H.R. 557 will allow Congress to closely examine and oversee the CFPB’s current and future actions.”