More On Legal & Compliancefrom 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 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.
- Regulatory Oversight of Investment Advisors Although the regulatory environment is in a state of flux, it is imperative that RIAs adhere to their compliance obligations. To ensure compliance, RIAs and IARs must fully understand what those obligations are.
The chairman of the House Financial Services Oversight and Investigations Subcommittee told the New York Federal Reserve Bank Monday that he wants more information about the handling of banks’ alleged “manipulation and suppression” of the London Interbank Offered Rate (LIBOR).
In a Monday letter to the Fed branch's president, William Dudley, the subcommittee chairman, Rep. Randy Neugebauer, R-Texas, said that the previous information Dudley had presented revealed that the New York Fed knew that certain financial institutions were “not posting honest LIBOR rates.” He said the documents showed that the Fed “worked to identify flaws in the way LIBOR was set and subsequently made recommendations for enhancing the credibility of the rate to the Bank of England.”
However, Neugebauer told Dudley that “what is less clear” was how the Fed “dealt with admissions of market manipulation by LIBOR-contributing banks.”
Said Neugebauer to Dudley: “As you know, the role of the government is to ensure that our markets are run with the highest standards of honesty, integrity and transparency. Therefore, any admission of market manipulation—regardless of degree—should be swiftly and vigorously investigated.”
Neugebauer told Dudley that “there are many outstanding questions” regarding the NY Fed’s role in the LIBOR scandal. The letter asked that by Sept. 1, the New York Fed provide documents on all communications since August 2007 among its employees and with U.S. and British government officials, as well as with regulators in both countries, the British Bankers Association and employees of LIBOR-contributing banks, on the setting of LIBOR.