More On Legal & Compliancefrom The Advisor's Professional Library
- Nothing but the Best Execution Along with the many other fiduciary obligations owed by RIAs, firms owe a duty to seek best execution of clients transactions. If they fail to do, RIAs violate Section 206 of the Investment Advisers Act.
- Anti-Fraud Provisions of the Investment Advisers Act RIAs and IARs should view themselves as fiduciaries at all times, whether they meet the legal definition or not. Deviating from the fiduciary standard of full disclosure while courting clients may cause the advisor significant problems.
While the icy stalemate that ensued in Congress in 2012 is “beginning to thaw,” expect further gridlock on the House Financial Services Committee, Rep. Jim Himes, D-Conn., a member of the committee, told state regulators Tuesday.
Speaking at the North American Securities Administrators Association’s (NASAA) annual public policy conference in Washington, Himes said that signs of congressional gridlock abating came in January with passage of several pieces of “big” legislation. They include: the $60 billion emergency relief legislation that was passed for Hurricane Sandy; the renewed Violence Against Women Act; and higher income tax rates for those earning more than $450,000.
Himes also said he was “confident” Congress would make progress on immigration reform. But he said he feared “we’re on the cusp of not doing anything at the federal level” regarding meaningful gun safety laws.
But Himes told NASAA attendees not to expect much “forward motion” on the House Financial Services Committee, as “idealogy and emotions are as high” on both sides of the aisle as he’s seen them. As to the Dodd-Frank financial reform law, Himes said “emotions are higher than they were three years ago,” with a “morality play” still ensuing concerning the financial services reform law. There are those who want to repeal it and “others like me who don’t want to amend” the law, he said.
Himes said he didn't foresee “any statutory amendments” taking place to Dodd-Frank in the next year or more.
Himes also noted that while the financial services committee—under its new chairman Rep. Jeb Hensarling, R-Texas—has been having a hearing “every week” on the Federal Housing Administration(FHA), “we should be trying to find a deal around Fannie and Freddie, [but] we aren’t doing that.”
As to a fiduciary standard for brokers, Himes said that he would like to see “one fiduciary standard, period, for investment advisors and brokers,” coming from the Securities and Exchange Commission and the Department of Labor. Regarding fiduciary duty, “having a prime directive around simplicity is going to help all of us in the long run,” Himes said. “I would like to see one fiduciary standard for anyone in a fiduciary relationship.”
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