More On Legal & Compliancefrom The Advisor's Professional Library
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- 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.
The Financial Industry Regulatory Authority announced Tuesday that it will not collect sensitive personally identifying information from the data the self-regulator is to receive from its new Comprehensive Automated Risk Data System (CARDS).
FINRA stated that after considering the written comments on the CARDS concept proposal and the views expressed discussions with industry participants regarding investor privacy, the regulator “has concluded that the CARDS proposal will not require the submission of information that would identify to FINRA the individual account owner, particularly account name, account address or tax identification number.”
Dale Brown, president and CEO of the Financial Services Institute (FSI), said that while he applauded FINRA’s decision to not collect sensitive data, FSI still has some concerns about the CARDS plan. “Today, FINRA took an important step forward in their CARDS proposal, by announcing they will not collect sensitive personally identifying information from the data they plan to receive,” Brown said. “While we still have concerns with data security, costs and other unintended consequences of the proposal, we applaud FINRA’s response to industry concerns. We will continue to work with them as this proposal is considered.”
In December, FINRA requested comments on the concept of a new Comprehensive Automated Risk Data System. FINRA is taking comments on the CARDS proposal until March 21.
CARDS is a rule-based program that would allow FINRA to collect on a standardized, automated and regular basis, account information, as well as account activity and security identification information that a firm maintains as part of its books and records.