More On Legal & Compliancefrom The Advisor's Professional Library
- Whistleblowers A whistleblower is any individual providing the SEC with original information related to a possible violation of federal securities law. The Dodd-Frank Act established a whistleblower program that enables the SEC to reward individuals who voluntarily provide such information.
- 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.
To thwart the passage of an SRO bill next year, the Financial Planning Coalition is pressing to ensure a “bipartisan bill” originates in the Senate next year allowing the Securities and Exchange Commission (SEC) to collect user fees from advisors to fund their exams “as it has a better chance of passing in the House,” says Karen Nystrom, head of public policy and advocacy for the National Association of Personal Financial Advisors (NAPFA).
Speaking at the NAPFA East conference in Baltimore on Thursday, Nystrom said that both Rep. Spencer Bachus’ bill (H.R. 4264) calling for a self-regulatory organization (SRO) and Rep. Maxine Waters’ bill (H.R. 6204) allowing the SEC to collect user fees to fund advisor exams “will resurface” next year.
Nystrom told AdvisorOne that the Coalition—comprised of NAPFA, the CFP Board, and the Financial Planning Association (FPA) —is now “seeing where our strengths are” in the Senate to ensure a user fees bill gets introduced in 2013.
The Coalition’s “advocacy has been working,” Nystrom told the audience of fee-only planners. “We are a strong force,” as the groups were able to “temporarily beat back the Bachus bill” this year.
However, Nystrom said: “We need a bipartisan bill in the Senate to get any traction on [beating] the SRO legislation. We need to advocate for legislation that keeps us with an open, transparent body” like the SEC.
While Bachus, R-Ala., will not be chairing the House Financial Services Committee next year due to term limits, Jeb Hensarling, R-Texas, will likely take over the reins. Perhaps a bit of good news is that “we’ve heard rumors that [Hensarling] is not wild about” Bachus’ SRO bill, Nystrom said. “But one never knows.”