More On Legal & Compliancefrom The Advisor's Professional Library
- 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 communicationsto clients, from clients, and about client accounts. To comply with fiduciary obligations, communications must be thorough and not mislead.
- 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 Securities and Exchange Commission (SEC) announced Thursday that Robert Plaze, the deputy director of the Division of Investment Management, is retiring from public service at the end of August after almost 30 years at the SEC. The agency announced the same day that it has named John J. Cross III the director of the agency’s new Office of Municipal Securities.
Plaze, who has been a key architect of the rules governing investment advisors, investment companies, and private fund advisors, joined the SEC in 1983 as an attorney in the Division of Investment Management, which oversees the multitrillion-dollar investment management industry, and went on to become a Special Counsel, Assistant Director, Associate Director for Regulatory Policy, and Deputy Director.
“Few people have had as great an impact shaping the regulatory landscape for the benefit of individual investors,” said SEC Chairwoman Mary Schapiro in a statement. “Bob’s keen intellect and passion for investor protection have been central to virtually every significant rule affecting mutual funds and investment advisers for more than a generation."
Norm Champ, Director of the Division of Investment Management, said in the same statement that “Bob has been instrumental in the creation of the regulatory regime for investment advisers and investment companies. He has worked in numerous capacities in the division and has had a long and distinguished career working on behalf of investors.”
Plaze was most recently responsible for rulemaking regarding money-market mutual funds and to implement a Dodd-Frank Act requirement for hedge fund and other private fund advisers to register with the SEC. The SEC lists his other critical roles as: rulemaking to improve mutual fund governance practices; to include fee tables in mutual fund prospectuses; to standardize the method of calculating mutual fund performance used in advertisements; to require mutual funds and investment advisers to adopt compliance programs; to require investment advisers to deliver a plain-English brochure to clients, and to protect pension funds and other investors from “pay-to-play” practices.
The new Office of Municipal Securities was previously part of the Division of Trading and Markets until the Dodd-Frank Wall Street Reform and Consumer Protection Act called for the creation of a standalone office that reports directly to the chairman and administers commission rules regarding advisors, issuers, broker-dealer practices, and investors in the municipal securities market. The office also will coordinate with the Municipal Securities Rulemaking Board (MSRB).
For the past several years, Cross has been serving as the associate tax legislative counsel in the Office of Tax Policy at the U.S. Treasury Department, where he has had significant responsibility for legislative, regulatory and budgetary tax matters affecting municipal bonds.