The Financial Services Institute said Tuesday that it will work this year to help regulators modernize rules around recordkeeping and off-channel communications as they were written for a paper-based environment, as well as help expand the accredited investor definition.
The off-channel and recordkeeping rules need "to reflect current technologies and business practices and allow for innovation," according to an FSI spokesperson.
FSI announced its priorities from its annual One Voice conference in San Diego.
Another priority for the group this year is pushing for e-delivery.
"Despite widespread internet use, regulations still require many investor communications to be mailed. FSI supports allowing e-delivery as the default, giving investors faster, safer and more convenient access to information," the group said.
The House passed last December a package of bills that included the Improving Disclosure for Investors Act, H.R. 2441, which requires the Securities and Exchange Commission to write a rule allowing financial firms to deliver documents in digital format.
The package also included the Fair Investment Opportunities for Professional Experts Act, which expands the accredited investor definition to include inflation-adjusted net worth and income tests. It also adds certain licensed professionals — including CFPs — and individuals with qualifying education or experience.
The Equal Opportunity for All Investors Act, also included, requires the SEC to direct the Financial Industry Regulatory Authority to create and administer a "new, rigorous investment exam" to earn accredited investor status.
The Financial Industry Regulatory Authority is taking a broad look at its rulebook, which includes e-delivery and digital communications.
Other FSI Priorities
FSI will also support efforts to push for practical, innovation-friendly artificial intelligence regulation and will be "engaging with the federal and state policymakers on independent contractor rulemaking and guidance."
The Labor Department filed a new independent contractor rule at the Office of Management and Budget for review in early January.
FSI, which fought Labor's 2024 independent contractor rule in court, told ThinkAdvisor in late January that the group is "encouraged" that Labor has initiated new rulemaking.
"It is essential that any new rule preserves financial advisors' ability to choose the independent contractor model, operate their own businesses and serve their clients as they see best," FSI said in an emailed statement. "We look forward to reviewing the proposal once it is made public."
OMB review can take up to 90 days.
FSI is also backing a bill, the Clarity for Compensation Act, that seeks to update SEC rules to "permanently allow commission payments to be made directly to advisors' business entities."
Dale Brown, FSI's president and CEO, said on Jan. 23 that comp rules must "modernize" to serve both advisors and investors.
The Clarity for Compensation Act "ensures that these businesses can operate more efficiently, recruit the next generation of advisors, and offer their clients a wider range of products and services to better meet their financial needs," Brown said.
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