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Regulation and Compliance > Federal Regulation

SEC Loosens CFP Board Reins

By Warren S. Hersch

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The U.S. Securities and Exchange Commission (SEC) says the CFP Board of Standards can use client information provided by registered investment advisors (RIAs) and broker-dealers when disciplining advisors.

An SEC official has blessed CFP Board use of non-personal client information provided by RIAs and broker-dealers in a “no action” letter sent to the CFP Board, Washington.

The CFP Board can use the non-personal client information with violating the Regulation S-P privacy regulation in cases in which the board is looking into the possibility of disciplining a board-certified advisor, the official told the board.

The SEC staff will not bring an enforcement action against a broker-dealer or RIA who shares non-public personal customer information with the CFP Board for purposes of helping with disciplinary proceedings involving board-certified advisors, the official says in the no-action letter.

The CFP Board has issued a statement welcoming the no-action letter.

Michael Shaw, a CFP Board managing director, says firms often cite Regulation S-P as a reason they cannot help the board with investigations.

Thanks to the new no-section letter, “that will no longer be the case,” Shaw says in a statement. “The end result will be investigations that take less time to complete. I expect to see a significant reduction in the number of cases that we dismiss for lack of sufficient evidence.”

In addition to investigating allegations of misconduct, the CFP Board also conducts background checks of candidates seeking Certified Financial Planner certification, and the no-action letter also should speed up the routine CFP certification process, board officials say.

Other CFP Board coverage from National Underwriter Life & Health:

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