More On Legal & Compliancefrom The Advisor's Professional Library
- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
- 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.
Foreign regulators investigating the possibility of manipulation of the London Interbank Rate have asked the Monetary Authority of Singapore for its assistance in uncovering possible global interest rate manipulation.
Bloomberg reported Friday that MAS said it had been asked by foreign authorities to assist in some investigations into allegations that interbank interest rates had been manipulated. In a statement, the central bank said, “MAS is aware of investigations into possible manipulation of interbank rates by other regulators and has received requests for assistance from some.” It did not specify which regulators sought help, but said it would cooperate.
In a statement, it said, “MAS will also work with the relevant authorities to act on any suspected manipulation” by Singapore-based financial institutions or individuals. “MAS will assist where it is appropriate to do so.”
Interbank rates, including Libor, are under investigation by a number of countries amid suspicion of bank misconduct. The U.S. has launched a criminal investigation and European authorities are looking into allegations that banks may have colluded to trade derivatives based on the rate.
In a Singapore case, Royal Bank of Scotland Group is accused by a former trader fired by the bank of using an internal Libor manipulation probe to find scapegoats after condoning such behavior. RBC says the trader was fired for trying to influence the Libor rate; he claims that he and at least seven colleagues were instead consulted on yen Libor submissions by staff who set the rates and by senior managers.
Banks that have said they were asked to provide information include RBC, HSBC Holdings and Barclays.
Japanese regulators are looking at ways to improve how it sets Libor, as its interbank rate is known. The Japanese Financial Services Agency in December ordered Citigroup and UBS to suspend some derivative transactions after it found instances of staff at both institutions attempting to influence the setting of interbank lending rates.