More On Legal & Compliancefrom The Advisor's Professional Library
- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
- Dealings With Qualified Clients and Accredited Investors Depending upon an RIAs business model and investment strategies, it may be important to identify “qualified clients” and “accredited investors.” The Dodd-Frank Act authorized the SEC to change which clients are defined by those terms.
The Securities and Exchange Commission announced Monday that Mark J. Flannery will be the agency’s new chief economist and director of its Division of Economic and Risk Analysis.
Flannery, who is currently a finance professor at the University of Florida’s Warrington School of Business Administration, will begin his new post in September.
DERA, created in 2009 to act as the SEC’s economic think tank, provides interdisciplinary analysis to help inform the Commission’s policymaking, rulemaking, enforcement and examinations.
“Professor Flannery is a widely respected economist with extensive experience in many areas relevant to the SEC’s mission, including the regulation of financial institutions, corporate finance, private funds, and credit ratings agencies,” said SEC Chairwoman Mary Jo White, in a statement. “His decades of research experience in the field of financial economics, as well as his work with other financial regulators, will be valuable assets as he leads the Commission’s strong team of economists.”
Flannery replaces Craig M. Lewis, who returned to his post as a professor of finance at Vanderbilt University’s Owen Graduate School of Management. Since Lewis left in May, deputy directors Scott Bauguess and Jennifer Marietta-Westberg have acted as co-directors of the division.
The SEC notes that DERA staffers have expertise in disciplines including economics, risk analysis, finance, law, mathematics and statistics, and that due to an increase in the number of complex matters before DERA, its staff has grown to nearly 100, up from 60 in 2011, with further expansion planned for 2014.
Some of DERA’s recent activities include providing economic analysis for the Commission’s cross-border security-based swap rules and guidance, writing white papers on topics such as over-the-counter trading and the interconnectedness in the credit default swaps market that help the Commission better understand activity in these markets, and providing analysis on enforcement actions involving market manipulation, insider trading and accounting fraud.
Barbara Roper, director of investor protection for the Consumer Federation of America, said recently that the Investor as Purchaser subcommittee that she heads as a member of the SEC’s Investor Advisory Committee would consult with DERA as it drafts recommendations that apply to “natural persons” under the SEC’s accredited investor definition.
Since 1989, Flannery has been an eminent scholar in finance at the University of Florida. From 1984 to 1989, he was a professor at the University of North Carolina at Chapel Hill. He taught at the University of Pennsylvania from 1976 to 1984 and was a visiting professor at New York University, the London Business School and the University of New South Wales.
In addition to his teaching experience, Dr. Flannery has served on the Federal Reserve’s Model Validation Council since May 2012 and as a senior advisor at the Treasury Department’s Office of Financial Research since May 2011.
Flannery was a resident scholar at the New York Federal Reserve Bank Research Department from 2009 to 2010 and has served on its Financial Advisory Roundtable since 2006. He also has been an advisory committee member of the Federal Reserve Bank of Atlanta’s Center for Financial Innovation and Financial Stability since 2009, and was the co-director of the FDIC’s Center for Financial Research from 2003 to 2007.
Check out SEC Investor Advisory Committee Mulls 'Accredited Investor' Criteria on ThinkAdvisor.