RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of June 24, 2017

Posted by RIA in a Box

Jun 30, 2017 4:23:06 PM

SEC RIA examination OCIE budget for 2018

Each week we’re giving you our weekly report highlighting the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to registered investment adviser ("RIA") compliance and regulatory issues. This week's recap focuses on the Department of Labor ("DOL") fiduciary rule and the future of the Securities and Exchange Commission ("SEC") investment adviser examination program . Check back each week for the latest list of top stories.

Here's our top investment adviser compliance articles for the week of June 24, 2017:

Download the Checklist on how to Comply with the DOL Fiduciary Rule

  1. SEC to Decrease Exam Funding While Increasing Exams (Author- Diana Britton, Wealth Management)

Diana Britton of Wealth Management reports the SEC's 2018 fiscal year budget proposal was discussed earlier this week by Chairman Jay Clayton. "Clayton said the agency is on track this year to examine 20 percent more investment advisors compared with fiscal year 2016, when it completed 1,600 exams." Clayton anticipated that RIA exams at the federal level will increase by 5% in 2018. The budget of $1.602 billion that Clayton requested is said to provide $341 million for its exam program, which is $5 million less than the examination budget for the current fiscal year. Britton includes that Clayton points out that despite decreasing funding, "enforcement and exam programs account for more than half of the requested budget."

  1. DOL Issues Request for Comment on Fiduciary Rule to Guide Review, Possible Revisions of Measure (Author- Mark Schoeff Jr., Investment News)

The possibility of further delaying the January 1 implementation date of the DOL fiduciary rule is currently being considered. Mark Schoeff Jr., Investment News reporter, writes that the DOL released a new request for comment that has been posted on the DOL website and will soon to be published in the Federal Register. "The DOL is soliciting comments to guide its review of the regulation that was mandated by President Donald J. Trump earlier this year and could result in changes to the regulation." The future of the rule could also change if the SEC decides to create its own fiduciary rule. The outcome of this is still unknown but it's appearing more likely that the DOL fiduciary rule's current applicable requirements are likely to remain.

  1. SEC Moving Forward on Fiduciary Rule, Clayton Says (Author- Melanie Waddell, ThinkAdvisor)

Think Advisor's Melanie Waddell reports, "SEC Chairman Jay Clayton on Tuesday signaled that the agency is moving ahead on a coordinated fiduciary rule with the DOL." In regards to collaborating with the DOL on a uniform fiduciary rile, Clayton notes, ""I am confident that we're going to have cooperation in this regard. It's a very complicated issue. I don't think it would have been here this long if it weren't complex, but I'm confident that we're going to cooperate." In a separate hearing, Labor Secretary Alexander Acosta shared a similar sentiment stating that, "I think that the SEC has important expertise and that they need to be part of the conversation."

  1. Interesting Angles on the DOL's Fiduciary Rule #53 (Author- Fred Reish, Fredreish.com)

Fred Reish, one of our top 5 DOL fiduciary rule experts to follow, published his 53rd article about his observations on the DOL fiduciary rule. In this particular article, he discusses the differences in discretionary and non-discretionary accounts and how the prohibited transaction rules and exemptions apply to each. Reish reveals that one similarity of the two is that "ERISA’s prudent man rule and duty of loyalty apply for both discretionary and non-discretionary advice to retirement plans and participants."

  1. Beauty Is in the Eye of the Discloser: Suggestions for CFP Board's New Standards (Author- Bob Clark, Think Advisor)

The CFP Board recently released proposed changes to its Code of Ethics and Standards of Conduct. Think Advisors Editor-at-Large, Bob Clark, believes after reviewing reactions to the proposed changes, many think the agency is taking "a rather soft stand on conflicts of interest." Clark discusses the topic of conflicts of interest and two steps that must be taken in order for CFPs to likely act in the best interest of their clients. He also shares some pre-packaged disclosures for common conflicts CFPs may encounter.

Download the SEC 2017 RIA Top 10 Exam Priorities Checklist

Don't forget to check out last week's top RIA compliance news articles on the DOL fiduciary rule and the future of RIA regulatory audits. Be sure to check back next Friday for next week’s top articles! 

Lexington Compliance and RIA in a Box LLC are not law firms, investment advisory firms, or CPA firms. Lexington Compliance and RIA in a Box LLC do not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

Topics: RIA Compliance

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