More On Legal & Compliancefrom The Advisor's Professional Library
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
- Risk-Based Oversight of Investment Advisors Even if the SEC had a larger budget and more resources, it is doubtful that the Commission would have the resources to regularly examine all RIAs. Therefore, the SEC is likely to continue relying on risk-based oversight to fulfill its mission of protecting investors.
The Department of Labor’s reproposed fiduciary rule will likely be released a “couple months after July,” Phyllis Borzi (left), assistant secretary for DOL’s Employee Benefits Security Administration, said during a Tuesday afternoon meeting with the ERISA Advisory Council.
After pulling the original draft of the rule to amend the definition of fiduciary under the Employee Retirement Income Security Act (ERISA) last year, Borzi and her team had said that a redraft would likely come in July.
A discussion draft was introduced in mid-May by Rep. Ann Wagner, R-Mo., that was intended to stymie efforts by the Securities and Exchange Commission and DOL to move forward in crafting their fiduciary rules, but industry officials said the draft, as currently written, would prove to be of little consequence.
In introducing the discussion draft at a late May hearing titled "Legislative Proposals to Relieve the Red Tape Burden on Investors and Job Creators," Wagner stressed that it was “a discussion draft,” and said that the measure was intended to address “one of the biggest issues facing retail investors today, the fiduciary issue. What we have is the SEC and DOL heading toward massive rulemakings, changing the way American investors choose investments—and not necessarily for the better.”