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 RIA in a Box's new open application programming interface ("API"), continuing education requirements for investment adviser representatives ("IARs"), and the shifting regulatory landscape.
Here's our top investment adviser compliance articles for the week of February 14th, 2020:
1. New RIA in a Box API Helps Advisors with Compliance: T3 Tech Roundup (Author- Jeff Berman, ThinkAdvisor)
Earlier this week, RIA in a Box announced their new open application programming interface (“API”) at T3 in San Diego. This will provide even more chances for integrations and growth within the industry, especially for vendors and registered investment adviser (“RIA”) firms. GJ King, President of RIA in a Box, stated, “By unveiling this API, we invite other leading technology providers in the industry and even RIA firms themselves to push data into our system to save compliance officers times and create deeper integrations within the tech stack.” The API platform is now live for all current MyRIACompliance® clients.
2. State regulators propose continuing education for investment adviser reps (Author- Mark Schoeff Jr., InvestmentNews)
The North American Securities Administrators Association (“NASAA”) proposed a rule last week that would establish a continuing education requirement for IARs. Under the proposed rule, IARs would have to complete 12 hours of continuing education courses annually with the hours being split between products and practice and ethics and professional responsibility. “IARs play an importance role in the financial lives of millions of Americans, yet unlike most financial services professions they are not required to meet a continuing education requirement to maintain their licenses to work with investors. We are proposing a program to close this education and investor-protection gap,” explained Alex Glass, Indiana securities commissioner and chair of NASAA’s investment adviser section.
3. What Every RIA Should Know About the Shifting Regulatory Landscape (Author - William H. McCane, ThinkAdvisor)
William H. McCance sheds light on the upcoming changes to the wealth management industry and how advisers can best prepare themselves. McCance states, “As the regulatory client continues its seismic shift, financial advisors need to begin planning to ensure they remain compliant with new government mandates while meeting client expectations.” He then suggests the steps an adviser should take to meet client expectations, such as having a succession plan so clients know that if anything were to happen to you, their investments and in turn, themselves, will be taken care of. McCance adds, “At its core, increased regulatory oversight is meant to deliver on an advisor’s promise to guide clients and help them prepare for life’s transitions. If you are leaving those same clients vulnerable by not preparing your own practice for when you are no longer at the helm, you are breaking that promise.”
The Securities and Exchange Commission (“SEC”) has named Nancy Sumption as the new senior advisor for cybersecurity policy to SEC Chairman Jay Clayton. “Through Nancy’s extensive experience within the federal government and the private sector, she has developed a deep knowledge of the cyber risk landscape that will benefit the SEC and market participants through our own initiatives as well as through our participation in interagency efforts,” Clayton said. Sumption comes to the position with an extensive and impressive background, including “more than 20 years working in U.S. intelligence, the Department of Justice, and as an officer and staff judge advocate in the U.S. Air Force”. Sumption recently stated, “I am honored to have been selected by Chairman Clayton to serve in this position. I look forward to working with him, the SEC staff, fellow regulators, and industry to deepen our partnerships to enhance operational resiliency and manage cyber risks.”
5. President Bloomberg Would Bring Back DOL Fiduciary Rule (Author - Patrick Donachie, Wealth Management)
Presidential candidate Michael Bloomberg has stated that if elected, he pledges to bring back to the Department of Labor (“DOL”) Fiduciary Rule. Patrick Donachie explains, “The DOL’s fiduciary rule mandated that any brokers and insurance agents would have put their customers’ financial interests above their own, but the rule was struck down in federal court in March 2018.” The Trump administration said it would release a new rule that would be more along the lines of Regulation Best Interest (“Reg BI”), that will go into effect this June.
Don't forget to check out last week's top RIA compliance news articles focusing on proposed continuing education requirements for IARs, frequently asked questions on the SEC's regulation best interest rule ("Reg BI"), and cybersecurity.