More On Legal & Compliancefrom The Advisor's Professional Library
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
At the Securities Industry and Financial Market Association’s annual meeting in New York on Tuesday, SIFMA President and CEO T. Timothy Ryan Jr. put his support behind the Dodd-Frank reform act but scoffed at the Volcker Rule as unworkable.
Before a packed audience at the Marriott Marquis on Times Square, Ryan (left) noted that “no one can be happy with where reform stands,” considering that political and bureaucratic constraints have produced a complex 2,300-page law that required 87 studies by regulators and will ultimately lead to an estimated 398 rules.
Yet Ryan conceded that reform is needed.
“These reforms are critical to restoring the trust and confidence that is so essential to our markets,” he said in prepared remarks. “We have also been upfront in objecting to provisions that we believe are, at best, extraneous and unrelated to the financial crisis, such as the Volcker Rule. But, we have never supported a complete repeal of Dodd-Frank, and do not support repeal now.”
Also on hand during the morning’s presentations were SIFMA Board Chairman Chet Helck, who spoke about the emotional side of the beleaguered finance industry, and Gary S. Gensler, chairman of the U.S. Commodity Futures Trading Commission, who spoke about the future of derivatives transparency.
Helck, who is also CEO of the Global Private Client Group at Raymond James Financial, noted that while policy changes are critically important, he wanted to talk about the feeling side of the business—namely, the advisor-client relationship.
“Feeling good about being in our business has been a challenge,” Helck (right) said. “We know we do good, but does anybody else believe that?”
Yet the finance industry employs close to 8 million people nationwide, funds the building of roads and bridges and has helped U.S. companies raise more than $1 trillion to create jobs, Helck said.
“Our main job this year is to restore trust in our industry,” he said, acknowledging that regardless of the results of the presidential election, the industry has a lot of explaining to do to skeptics on Main Street and Capitol Hill. “We have to fix what’s wrong and take accountability and then emphasize what’s right.”
In a similar vein, Gensler addressed the CFTC’s role in the financial crisis of 2008, saying that the U.S. public will benefit from real-time reporting for the $650 trillion global derivatives market by 2013.
“The Dodd-Frank Act’s goal is to ensure the swaps market better serves the rest of the economy,” Gensler said in prepared remarks. “The law, in its simplest form, is about bringing competition and transparency to the swaps market….It’s about lowering the risks of swap dealers and the swaps market to taxpayers.”
Gensler went on to say that as of Oct. 12, “these common-sense reforms are becoming a reality,” with swap dealers beginning the process of registration of transactions in real time. “We anticipate that many will do so by Jan. 1. For the first time, regulators and the public are beginning to benefit from market transparency. And central clearing will soon lower risk and help level the playing field for anyone who wants to compete in the market.”