More On Legal & Compliancefrom The Advisor's Professional Library
- Updating Form ADV and Form U4 When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material.
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
This is an extended version of the profile that appeared in the May issue of Investment Advisor, part of AdvisorOne's Special Report profiling this year's members of the IA 25, the most influential people in and around the advisor universe. See the complete list and Special Report schedule for extended profiles of all the 2011 members of the IA 25.
Since taking the helm of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises in January, Rep. Scott Garrett’s goals have been clear: roll back Dodd-Frank, deny the Securities and Exchange Commission (SEC) a funding increase, dismantle Fannie Mae and Freddie Mac, and slow down the SEC’s fiduciary duty rulemaking.
The New Jersey Republican and his fellow Republicans on the subcommittee, as well as GOP members of the full Committee, told SEC Chairman Mary Schapiro in a recent letter that the SEC “lacked a clear basis” to move forward with a fiduciary duty rulemaking for brokers, and that a cost benefit analysis was needed before the agency should push ahead. (See Schapiro’s response to Garrett’s letter.)
Garrett has promised to hold a hearing soon to further review the SEC’s fiduciary duty rulemaking as well as the study mandated under Section 914 of Dodd-Frank, commonly referred to as the self-regulatory organization (SRO) study. “The oversight, examination and enforcement programs that different financial services providers are subject to must be considered concurrently” with a fiduciary duty for brokers, he argues.
Both the SEC and the Commodities Futures Trading Commission (CFTC), Garrett has argued, have been able to deliver numerous studies and rules mandated under Dodd-Frank at their current funding levels, and that further compliance with Dodd-Frank should not equate to “spending more money.”
Garrett’s subcommittee will not only play a big role in how Dodd-Frank moves forward this year, but it will also be instrumental in attempting to privatize housing finance. GOP members of the full committee as well as Garrett’s subcommittee introduced eight pieces of legislation in late March to “wind down” mortgage giants Fannie Mae and Freddie Mac.
In early April, as the Capital Markets Subcommittee was in the process of marking up the eight bills, Garrett said that “this is only the beginning of this subcommittee’s work to continue to address the problems with the GSEs and help create a more sound and stable U.S. housing finance market going forward.” As the Treasury Department notes in a recent white paper, Garrett continued, “having the U.S. federal government underwrite 95% of the nation’s housing finance market is completely unsustainable and we must take actions now to attract private capital back to the market.” If Congress does nothing, Garrett continued, “as some suggest, then the government will continue to bear the burden of the entire nation’s housing market, adding further stress to the already overwhelmed federal budget balance sheet.”
Read more about the rest of the IA 25.
Don't see someone on this year's IA 25 that you think belongs there? Submit their name and your justification for why they should be considered among the most influential people in and around the advisor universe in the Comments field below. We promise to consider reader nominations, but please, no ad hominem attacks on those who were named in this or past years.--Ed.