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SEC Asset Management Committee to Meet Jan. 14

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The SEC’s newly formed Asset Management Advisory Committee plans to hold its first meeting at the agency’s Washington headquarters on Jan. 14.

The meeting will include a discussion of “various aspects of the asset management industry,” according to the meeting notice.

The committee, made up of diverse industry professionals, was formed to help direct the agency’s regulatory approach to emerging issues.

“This committee will help the Commission ensure that our regulatory approach to asset management meets the needs of retail investors and market participants at a time when the industry is evolving rapidly,” said SEC Chairman Jay Clayton in announcing the committee in early October.

Edward Bernard, senior advisor to T. Rowe Price, has been appointed the initial committee chairman.

Other committee members include Neesha Hathi, executive vice president and chief digital officer, Charles Schwab Corp.; Michelle McCarthy Beck, chief risk officer, TIAA Financial Solutions; Mike Durbin, president, Fidelity Institutional; and Paul Greff, chief investment officer, Ohio Public Employees Retirement System.

The SEC is also seeking comments on the Financial Industry Regulatory Authority’s plan to amend its Membership Application Program rules to help further address the issue of pending arbitration claims, as well as arbitration awards and settlement agreements related to arbitrations that have not been paid in full in accordance with their terms.

Comments are due to the SEC by Jan. 21.

FINRA Broker as Beneficiary Comments Due

Meanwhile, FINRA is taking comments until Jan. 10 on the self-regulator’s plan to limit a registered person from being named a customer’s beneficiary or holding a “position of trust” on behalf of a customer.

FINRA’s plan, issued in Regulatory Notice 19-36, would require the member firm with which the registered person is associated to review and approve the registered person assuming such status or acting in such capacity. The proposed rule would not apply where the customer is a member of the registered person’s immediate family.

The proposal would limit any associated person of a broker-dealer from being named a beneficiary, executor or trustee, or to have a power of attorney or similar position of trust on behalf of a customer.

“Most of the firms we talk to — not all — have policies around this” type of arrangement; “sometimes they outright prohibit it,” Robert Cook, FINRA’s CEO, said on Nov. 12 in discussing the plan during FINRA’s Senior Investor Protection Conference in Washington.

Some BDs require that brokers “give notice to the firm” that such an arrangement exists “and get approval. That’s effectively what this proposed rule would require; it would require that outside of family situations, that the advisor give notice to the firm and get approval from the firm, and the firm would be expected to execute a reasonable approach in deciding whether it’s appropriate under the circumstances … for the advisor to be a beneficiary or a trustee,” Cook said.

A lot of facts can come into play, Cook said. “The nature of the relationship that the advisor and the customer have had; how long that relationship is …” While FINRA doesn’t want to be “too prescriptive, we want to set up a process where notice, approval and reasonable oversight would have to happen.”