More On Legal & Compliancefrom The Advisor's Professional Library
- 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.
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
The Public Company Accounting Oversight Board plans to meet on Thursday to consider adopting a series of audit-related standards for broker-dealers that one lawyer says will add yet another layer of compliance on BDs’ plate.
The PCAOB, which was given authority under the Dodd-Frank Act to oversee the audits of BDs registered with the Securities and Exchange Commission, will consider at an open meeting adopting attestation standards for auditors of BDs, an auditing standard for supplemental information, and related amendments to other PCAOB standards.
The Board says it will also consider two attestation standards related to the auditor's examination of compliance reports and review of exemption reports of BDs, as well as consider a new standard on auditing supplemental information that accompanies financial statements audited in accordance with PCAOB standards.
Josh Horn, a partner and co-chairman of the Securities Industry Practice at Fox Rothschild in Philadelphia, told ThinkAdvisor that the standards, if adopted, “will have wide impact” on BDs, adding yet “another layer of compliance.”
On July 30, the SEC amended Rule 17a-5 to require, in part, that audits of broker-dealers’ financial statements and supplemental information, and exams of broker-dealers’ compliance reports, and reviews of broker-dealers' exemption reports be conducted by firms registered with the PCAOB and in accordance with PCAOB standards.
Check out SEC Adopts Stricter BD Custody Rules on ThinkAdvisor.