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.
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
The mutual fund industry and former Securities and Exchange Commission officials are fighting back over a rule adopted by the Commodity Futures Trading Commission that will force many mutual funds to register with the CFTC.
The Mutual Fund Directors Forum, the independent membership forum for fund directors, is the latest group to join in the fight along with the Investment Company Institute, the U.S. Chamber of Commerce as well as former SEC commissioners and senior officials at the agency.
On Thursday, the Mutual Fund Directors Forum filed a “friend of the court” brief with the Court of Appeals for the D.C. Circuit, supporting a challenge brought by ICI and the Chamber of Commerce.
Joining in the Forum’s brief were former SEC Chairman Richard Breeden, former Commissioners Paul Atkins, Ed Fleischman and Joe Grundfest, and former directors of the SEC’s Division of Investment Management Allan Mostoff, Paul Roye and Marianne Smythe.
The brief argues that the CFTC failed to account for and justify the impact that its rule change would have on shareholders of mutual funds. The brief notes that the CFTC failed to adequately quantify the increased costs that would result from funds being dually registered with the SEC and CFTC and did not show how shareholders would benefit from the new rule.
“It is still very unclear what, if any, benefits there will be to shareholders from having funds register with the CFTC,” said Susan Ferris Wyderko, president & CEO of the Mutual Fund Directors Forum, in a statement. “Investors will bear additional costs without offsetting benefits, and will be harmed when the number of risk management strategies offered by mutual funds is inevitably reduced as a result of funds trying to avoid triggering the burdens of dual registration.”