More On Legal & Compliancefrom The Advisor's Professional Library
- Preventing and Dealing with Client Complaints Although the SEC has not provided specific guidance on how client complaints should be handled, a firms policies and procedures should provide clear direction how to do so, as neglecting complaints can exacerbate a bad situation.
- 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.
The passage of legislation to allow the Securities and Exchange Commission (SEC) to collect user fees to fund advisor exams in the current political environment is “very unlikely,” Tom Selman, executive vice president of regulatory policy at the Financial Industry Regulatory Authority (FINRA), said Monday.
Speaking at the Insured Retirement Institute’s (IRI) government, legal and regulatory conference in Washington, Selman said that contrary to popular belief, the advisory and brokerage industries are not in “horrible disagreement” on whether advisors need to be examined more frequently. “The only area of disagreement [between the two industries] is how you go about it,” he said.
While the advisor industry would prefer a user fee approach to help pay for more advisor exams, the brokerage industry would rather see FINRA become the SRO. “The real question is whether the [advisory] industry is willing to accept the status quo of inadequate exams” or go for an advisor SRO “that would focus on exams and less on rulemaking” and be overseen by the SEC, Selman said.
Rep. Maxine Waters, D-Calif., announced at the June 6 hearing to discuss House Financial Services Committee Chairman Rep. Spencer Bachus’ bill calling for an advisor SRO that she plans to introduce legislation to allow the SEC to collect user fees to fund advisor exams. The yet-to-be-named bill would allow the SEC to determine the amount of the user fees based on an advisor’s size—including assets under management and the number and types of clients, as well as the advisor’s risk characteristics.