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.
- Regulatory Oversight of Investment Advisors Although the regulatory environment is in a state of flux, it is imperative that RIAs adhere to their compliance obligations. To ensure compliance, RIAs and IARs must fully understand what those obligations are.
Starting in January, the Massachusetts Securities Division will require that any person seeking to be registered as an investment advisor in the state must first consent to a background check via the Massachusetts Criminal Offender Record Information (CORI) system.
The Division announced Thursday that the requirement applies to all investment advisor representatives applying for registration in Massachusetts, “irrespective of whether they are associated with state or federally registered investment advisors.” However, the rule does not apply to those making annual renewal applications.
The securities division sought comments in March on whether to require criminal background checks for advisors. Comments were taken until May 15.
The request for comment, issued by Willam Galvin, secretary of the commonwealth of Massachusetts, said the state’s securities division “believes that it is in the public interest and for the protection of investors to conduct criminal background checks of those individuals seeking IAR registration in order to ensure that the applicant is not subject to a statutory disqualification and has truthfully and accurately disclosed any criminal background required on Form U-4.”
Galvin noted at the time that the division’s Registrations, Inspections, Compliance and Examinations Section was recently granted access to utilize the Massachusetts iCORI system, an electronic criminal history database, in order to conduct these reviews.
Check out Are Brokers Greedy Scumbags? by Jon Henschen on ThinkAdvisor.