More On Legal & Compliancefrom The Advisor's Professional Library
- Suitability and Fiduciary Duty Recommending suitable investments is more than just a regulatory obligation. Many investors bring cases claiming lack of suitability, so RIAs must continuously put the onus on clients to notify the advisor of changes in their financial situation.
- 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.
The Securities and Exchange Commission (SEC) announced Friday that it had named Craig Lewis as the SEC’s chief economist and director of the Division of Risk, Strategy, and Financial Innovation (RiskFin).
Lewis (left), the Madison S. Wigginton Professor of Finance at Vanderbilt University’s Owen Graduate School of Management, is currently a visiting scholar at the SEC and will assume his new role in June.
As the SEC notes in the release announcing Lewis’ appointment, RiskFin was created in September 2009 to provide interdisciplinary analysis to help inform the commission’s policymaking, rulemaking, enforcement and examinations. RiskFin encompasses the former Office of Economic Analysis, Office of Risk Assessment, and Office of Interactive Disclosure.
“Professor Lewis is a distinguished economist with a clear understanding of the complexities of financial markets,” said SEC Chairman Mary Schapiro, in a statement. “As the head of the division, he will not only lead our qualified team of expert economists, but will also help to inject strong data-driven analysis into the SEC’s decision-making process.”
Lewis first served as a visiting academic fellow at the SEC from January to July 2010, and subsequently returned in that same capacity in January 2011. The SEC says that “over this period he has provided advice on policy issues, worked on developing analytic approaches to identify violations of securities laws, and analyzed the over-the-counter derivative securities market.”
Lewis will no doubt be heading the team of economists that Schapiro has asked to analyze economic data that is available regarding fiduciary duty to help inform the rule to put brokers under the same fiduciary standard as advisors.