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, Securities and Exchange Commission ("SEC") RIA exam targeting, and new automated employee trade management software. Check back each week for the latest list of top stories.
Here's our top investment adviser compliance articles for the week of September 2, 2017:
- How the SEC is Using Automation and Targeting for Exams (Author- Tobias Salinger, Financial-Planning.com)
Tobias Salinger reports that the SEC has new tools at their disposal to help smooth out the inspection process. The SEC Office of Compliance Inspections and Examinations ("OCIE")has progressed technologically and will continue to provide a new analytics tool for their regulators. “OCIE tech advancements in the past five years have resulted in a ‘revolution’ over its capabilities compared to when (Director Peter) Driscoll started there in 2004, he added. Driscoll described the regulator’s national exam analytics tool — known as ‘NEAT’ — as its most significant tech accomplishment to date,” Salinger says. The new Form ADV changes taking effect on October 1, 2017 will also give the SEC access to more data.
- Battle Lines Form as SEC Considers New Fiduciary Rule (Author- Mark Schoeff, Jr., InvestmentNews)
“The Securities and Exchange Commission should not blend investment-advice standards that apply to investment advisers and brokers, as the agency considers a new advice rule, the Investment Adviser Association said in a recent comment letter,” Schoeff begins. This letter was sent in response to the SEC’s request for comments on the fiduciary rule. Some opposing the DOL rule state that the SEC is straying too far from current broker regulation, while proprietors of the rule argue that conflicts of interest could fail to be regulated.
- DOL Rule Delay May Save The Day: Half Of Advisors Unprepared (Author- Christopher Robbins, FA Magazine)
Another delay in the remaining components of the DOL fiduciary rule could provide less-prepared advisors with a minor reprieve, says Robbins. “Fewer than half of advisors feel like they’re well prepared to handle the implementation of the fiduciary rule,” according to a Practical Perspectives research report. Advisors are looking for all the help they can get to prepare for the rule, but the delays and lack of clarity present hurdles for them. Some are crossing their fingers, hoping that technology will smooth out the process.
New software from RIA in a Box will help RIA’s stay compliant, Andrus reports. Tuesday, RIA in a Box released new automated employee trade monitoring software, which is pertinent to Code of Ethics Rule (Rule 204A-1). "For many RIA firms the tracking of employee transactions and holdings, which is a key regulator focus area, is an antiquated, paper-driven process," GJ King, RIA in a Box president, said in a statement. "This new tool applies the latest in financial technology innovation to help RIA firms of all sizes automate employee trade submission, pre-clearance, review, and monitoring."
- SEC Chief Says Cyber Crime Risks are Substantial, Systemic (Author- John McCrank, Reuters)
“I am not comfortable that the American investing public understands the substantial risks that we face systemically from cyber issues,” says Jay Clayton, SEC chairman. McCrank and Clayton both feel advisors need to have full comprehension of cyber threats themselves so they can better relay it to their clients. New threats, related to new block chain and digital currency innovations are growing, though the SEC is investigating.
Don't forget to check out last week's top RIA compliance news articles on the DOL fiduciary rule, the new Form ADV changes, and the increasing number of new RIA registration. Be sure to check back next Friday for next week’s top articles!
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