More On Legal & Compliancefrom The Advisor's Professional Library
- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
- The Custody Rule and its Ramifications When an RIA takes custody of a clients funds or securities, risk to that individual increases dramatically. Rule 206(4)-2 under the Investment Advisers Act (better known as the Custody Rule), was passed to protect clients from unscrupulous investors.
Regulators globally are broadening the spread of their investigations into rate setting that began with manipulation of LIBOR. As they explore how rates were set for pricing on foreign exchange derivatives, UBS and Royal Bank of Scotland Group have suspended traders in Singapore.
Bloomberg reported late Sunday that UBS suspended at least two foreign exchange traders and RBS one as investigations widen to include rates other than LIBOR.
Ken Choy, a director in the emerging markets foreign exchange trading unit at RBS, was identified by a source as the trader suspended by that bank. The two put on leave at UBS, said a person with knowledge of the matter, have run afoul of an internal probe into manipulation of nondeliverable forwards. These are derivatives used by traders to speculate on the movement of currencies subject to domestic foreign exchange restrictions.
Among the currencies involved in the rigging operation are the Malaysian ringgit and the Indonesian rupiah; both currencies’ movements against the dollar are among the NDFs traded in Singapore. Spot rates for both are set by the Association of Banks in Singapore, which arrives at the rates by using data submitted by banks. Profit can be increased by traders who can move those spot rates.
Last month the Monetary Authority of Singapore said it was adding an investigation into NDF rate-rigging to its broadening probe of rate manipulation that began with LIBOR.