Troy Paredes, a former commissioner at the Securities and Exchange Commission, challenged advisors Tuesday to air their concerns about the SEC rule in the works that would require them to get a third-party audit.
A third-party exam rule for advisors “is an active discussion” at the SEC, Paredes warned attendees at MarketCounsel’s Summit in Miami on Tuesday. “These discussions [about such a rule] are taking place. Do you want to be a part of that discussion?”
SEC Chairwoman Mary Jo White as well as the current director of the agency’s Investment Management Division, David Grim, have said publicly a rule is being drafted, so this is “not just inside the beltway policy debates, this is real stuff and decisions get made and new rules get put into place,” Paredes said. “Do you want to be part of that discussion to inform us?” adding that he would have “benefited” from hearing more from advisors about their concerns.
Norm Champ, the former director of the SEC’s Investment Management Division, who sat on the panel with Paredes, reiterated his concerns about the agency’s plan to promulgate such a rule as it would be costly for advisors.
“What are they [the third-party audit firms] going to examine?” Champ asked. “If they examine everything, that will be expensive for the advisor.” He stated that the 200 examiners at the agency who monitor broker-dealers should be shifted to advisor exams.
White said in early April that among rules the agency would consider “advancing” this year was one to require a program of third-party advisor exams.
CCOs a Target
Andy Wels, regulatory counsel with MarketCounsel, told attendees at the event that CCOs “have a target ” on their backs, citing New York Governor Andrew Cuomo’s recently announced plans to propose rules that would clarify and expand the responsibility of New York State banks to thwart money laundering.