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Regulation and Compliance > Federal Regulation > SEC

The Lightning Round

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The SEC is moving forward at lightning speed, from a July Request for Information (RFI), to a Request for Proposals (RFP) due August 24th for the first leg of a major SEC study of how the different regulatory rules and entities for brokers and investment advisors affect ordinary investors.

In late June, the SEC issued a Request For Information (RFI), soliciting comments from potential contractors on a draft by the SEC of the first leg of this major study. Part of what the SEC wants to study is what effect the Broker/Dealer Exemption Rule, 202(a)(11)-11, which allows reps to provide advice to customers under “suitability” rules without having to register as an investment advisor and act under fiduciary rules, has had in individual investors.

In focus groups conducted for the SEC in 2005, individuals were clearly confused by the differences in the professional roles of registered representative versus investment advisor; representatives’ titles, and fees, commissions and disclosures. In the SEC announcement, SEC Chairman Christopher Cox says: “Our goal is to improve investor protection by updating our regulation to deal with the realities of today’s marketplace.”

For more on the upcoming study, please see “A New Regulatory Framework?”, in the August issue of Investment Advisor, on the Web here.

For the actual SEC RFP please go here.


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