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.
- Differences Between State and SEC Regulation of Investment Advisors States may impose licensing or registration requirements on IARs doing business in their jurisdiction, even if the IAR works for an SEC-registered firm. States may investigate and prosecute fraud by any IAR in their jurisdiction, even if the individual works for an SEC-registered firm.
The Securities and Exchange Commission (SEC) issued on Monday a policy statement describing the order in which the agency expects new rules regulating the derivatives market would take effect, and is requesting public comment on the statement.
The statement covers final rules to be adopted by the SEC under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
Title VII of the Dodd-Frank Act establishes a comprehensive framework to regulate over-the-counter derivatives, authorizing the Commodity Futures Trading Commission (CFTC) to regulate “swaps,” and the SEC to regulate “security-based swaps.”
SEC Chairwoman Mary Schapiro said that “The policy statement seeks to provide a ‘roadmap’ to market participants and the public on how we expect to implement the various regulatory requirements for this market.”
The SEC says that it is requesting public comment on its plan to phase in final rules regulating security-based swaps and security-based swap market participants. The policy statement does not estimate when the rules would be put in place, but describes the sequence in which they would take effect, the SEC says.
“The phased-in approach is intended to avoid the disruption that could occur if all the new rules took effect simultaneously,” the SEC said. “To date, the commission has proposed nearly all the rules required under the Act and already has begun to adopt those rules.”
In addition, the SEC says that its policy statement “discusses the timing of the expiration of the temporary relief the SEC previously granted to securities-based swaps market participants. The relief exempts these market participants from certain provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Trust Indenture Act of 1939. Much of this relief is due to expire when certain final rules under Title VII become effective.”