More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Client Commission Practices and Soft Dollars RIAs should always evaluate whether the products and services they receive from broker-dealers are appropriate. The SEC suggested that an RIAs failure to stay within the scope of the Section 28(e) safe harbor may violate the advisors fiduciary duty to clients, so RIAs must evaluate their soft dollar relationships on a regular basis to ensure they are disclosed properly and that they do not negatively impact the best execution of clients transactions.
The banking industry in Europe was given until mid-September to come up with more transparent fees by the European Union executive. It has not done so, according to Michel Barnier, who is in charge of regulating finance for the EU; therefore, he will propose new rules to make it easier for consumers to make informed choices.
Reuters reported that a spokeswoman for Barnier said Monday, "We will propose legislation on a framework for bank fees. There has been a process for the last year to try and sort this out via self-regulation with the banking industry but it's not worked." She added, "We want to make it easier for Europeans to be able to choose what's best on the market for them," she said, commenting on bank account costs. "Now, it is very difficult for them to do so."
Among other things, the European Commission had asked banks to use common terminology for current account services, and to inform consumers about what charges are assessed to their accounts. Currently it is difficult to compare bank account charges across Europe, which include such things as cash withdrawal fees or account maintenance fees. Complete transparency would allow customers more easily to compare charges and move to lower-cost accounts, driving competition to lower rates.
The EC can write a law that compels banks to reveal their fees; it cannot, however, cap them. While the law is expected to be proposed in 2012, it will require at least a year to work through all 27 EU nations and its parliament before it can become EU law.