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.
- 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 Financial Industry Regulatory Authority (FINRA) announced Wednesday that it has launched a pilot program offering parties in simplified cases pro bono or reduced-fee telephone mediation.
Participation in the pilot program, which began on Jan.15, is voluntary and open to cases involving claims of $50,000 or less, FINRA says.
“Telephone mediation is a lower-cost alternative, and would benefit dispute resolution forum users in many ways,” said Linda Fienberg, president of FINRA Dispute Resolution, in a statement. “Besides eliminating the travel and preparation costs typically associated with in-person mediation, telephonic mediation offers greater convenience and flexibility, and is a practical alternative for all parties involved.”
Parties interested in participating in the pilot can notify FINRA by visiting www.finra.org/arbitrationmediation/smallclaims. Also, FINRA says staff will notify eligible parties about the pilot program.
Mediators would serve on a pro bono basis on cases involving claims of $25,000 or less in damages. Reduced-fee mediation ($50 per hour) would be available on cases with damage claims between $25,000.01 and $50,000. FINRA says it will not charge any administrative fee for these cases.