SEC Reopens Comment Period on Books and Records, Notifications Rules for BDs

SEC says it did not act on the rule amendments to these areas it proposed in 2007

More On Legal & Compliance

from The Advisor's Professional Library
  • 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 RIA’s failure to stay within the scope of the Section 28(e) safe harbor may violate the advisor’s 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.
  • 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 communications—to clients, from clients, and about client accounts.  To comply with fiduciary obligations, communications must be thorough and not mislead.

SEC LogoThe Securities and Exchange Commission announced Thursday that it has reopened the comment period for 30 days on its proposed amendments to its net capital, customer protection, books and records, and notification rules for broker-dealers.

The proposed rule amendments are designed to update the financial responsibility rules for broker-dealers and make certain technical amendments. The commission issued the proposed amendments on March 9, 2007, and the public comment period on the proposal closed on June 18, 2007.

The commission says that it did not act on the rule amendments it proposed in 2007. “Given economic events, regulatory developments and passage of time since then, as well as the continuing public interest in this area, the commission believes that it would be appropriate to seek additional public comment on the proposed rule amendments,” the SEC said.

 

Reprints Discuss this story
This is where the comments go.