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September 23, 2016 at 01:41 AM
Now more than ever, good compliance is good business, said Brian Hamburger, founder and CEO of MarketCounsel, during an External IT conference in New York this week.
Hamburger specifically highlighted four examination priorities that the Securities and Exchange Commission “has shown by their actions, not by their words.”
“If you want to know what their words say, you can simply take a look at their examination priorities that they publish each year, typically in the first quarter,” Hamburger told the crowd. “Those are on their website.”
Hamburger breaks down four areas that he said the SEC is “actually focused on.”
IRA Rollovers
As Hamburger sees it, the SEC should have been ahead of the Department of Labor’s fiduciary rule.
“The SEC, for all intents and purposes, should be ahead of this issue,” Hamburger said. “They are the registrar” of broker-dealers, investment advisors and investment companies. “They’re also the government arm that deals with private funds…. That said, they have failed to act in terms of extending the fiduciary obligation to anyone else besides RIAs. The DOL is ahead on this issue.”
To compensate for this, Hamburger said the SEC is targeting IRA rollovers in their examinations.
“The SEC is coming in and they are effectively boot-strapping what they’d like to see, which is this extended fiduciary obligation, within their regulatory exams,” he said. “So there’s no rules, right? If you look through the SEC’s website, you’re not going to see any action with respect to the extension of the fiduciary obligation to brokers.”
Despite this, Hamburger said the SEC has taken a pretty aggressive position and is addressing this at “just about every single examination.”
“It’s one of the first questions they’re asking, and they’re asking the question of, ‘Can you show us how you are managing conflicts of interest in connection with your recommendation to rollover IRAs?’” he said.
Whistleblowers
The SEC wants to make sure firms are not impeding upon the rights whistleblowers would otherwise have, according to Hamburger.
