More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Client Communication and Miscommunication RIA policies and procedures must specify what type of communications should be retained. The safest course of action is for RIAs to retain all communicationsto clients, from clients, and about client accounts. To comply with fiduciary obligations, communications must be thorough and not mislead.
A new report from the Government Accountability Office, which details potential conflict of interest within the Federal Reserve, finds that the Fed is taking on additional risks to its reputation by allowing the banking industry to participate in choosing board members at the 12 regional Fed banks.
The report notes that while “the Federal Reserve System recently has made changes to Reserve Bank governance, it can take additional steps to strengthen controls designed to manage conflicts of interest involving Reserve Bank directors and increase public disclosure of directors' roles and responsibilities.
As such, to enhance transparency in its leadership, the chairman of the Federal Reserve Board should “direct the Reserve Banks to make key governance documents, such as such as board of director bylaws, committee charters and membership, and Federal Reserve Board director eligibility policy and ethics policy, available on their websites or otherwise easily accessible to the public.”
"Failing to make the process and decisions more transparent can decrease confidence in the Federal Reserve System and has resulted in questions about the integrity of Reserve Banks' operations and the appearance of conflicts of interest," the GAO said.
"The most powerful entity in the United States is riddled with conflicts of interest," Sen. Bernie Sanders, I-Vt., said in a statement Friday.
The report follows a call from Rep. Barney Frank, D-Mass., the top Democrat on the House Financial Services Committee, to give the president the authority to choose Fed leaders, while at the same time limiting the voting rights of those regional Fed presidents on central bank interest rate decisions.
Frank told Bloomberg TV’s Lisa Murphy in September that “Giving nonelected officials picked by nonelected people, private citizens, who come from the financial community, the right to vote on an important national policy is inconsistent with democracy.”
A bill submitted by the congressman on Sept. 13 would authorize the president to appoint four Federal Reserve presidents, in addition to the Federal Reserve chairman, to ensure you have “geographic diversity.”