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Top RIA Compliance News Articles for the Week of March 12th, 2021

Posted by RIA in a Box

Mar 19, 2021 4:24:42 PM

Top RIA compliance articles focus on NSecurities and Exchange Commission’s (“SEC”) ad rule, Form CRS, and a Paycheck Protection Plan (“PPP”) extension act

Each week we are 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 Securities and Exchange Commission’s (“SEC”) environmental, social, and governance “ESG” disclosure policy, cybersecurity risks for retirement participants, and how the pandemic influences how advisors use technology.

Here's our top investment adviser compliance articles for the week of March 12th, 2021:

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       1. SEC official says ESG disclosure policy must be ‘adaptive,’ ‘innovative’ (Author – Mark Schoeff Jr., InvestmentNews)

In this article, industry professionals discuss the need for the SEC to be “innovative” while reforming the environmental, social, and governance “ESG” disclosure policy. The ESG investment area is said to be increasingly popular among investors and has already been labeled a focus area for the SEC’s 2021 examination priorities. John Coates, acting director of the SEC’s Division of Corporate Finance stated that an effective ESG disclosure system should include “thoughtful engagement by trusted specialists seeking consensus among investors and companies” and be “flexible enough to remain relevant.”

       2. 401(k) Plans Have a Big Cybersecurity Problem, Need Guidance: GAO (Author – Ginger Szala, Think Advisor)

On Monday, March 15, The Government Accountability Office report was publicly released, which emphasizes the need for federal guidance to help reduce cybersecurity risks for investors with 401k and other retirement plans. Ginger Szala discusses the reported threats to 401k participants such as identity theft which could lead to cybercriminals stealing retirement savings.

The Government Watchdog group recommends for the Labor Department to set minimum guidelines for fiduciaries to mitigate the cybersecurity risks for investors.

       3. How the coronavirus has forever changed how advisors work with technology (FinancialPlanning)

This article sheds a light on how advisors have adopted new tools and technologies roughly one year after the pandemic lockdown. During a virtual Financial Planning event, Maura Creekmore, managing director of BNY Mellon Pershing, shared “adoption of technology went from being a nice-to-have option to a must-have mandate.” Such technologies adopted include conferencing apps like Zoom, e-signature tools, and digital processing of accounts. During this digital push caused by the pandemic, the industry has also seen momentum in product development by fintech companies.

       4. Acting SEC Chair Lee calls for more proxy voting disclosure by funds (Author – Mark Schoeff Jr., InvestmentNews)

Earlier this week, Allison Herren Lee, the acting chair of the SEC, called for more clarity on proxy voting by investment funds, specifically on environmental, social and governance “ESG” matters. The push for proxy reform is influenced by two factors, (1) growth of households investing in funds, and (2) rising demand for ESG investment strategies. In Lee’s statement, she discusses the importance for retail investors to be better informed of how a fund votes on ESG issues.

       5. Voices: Money market reform awaits Gensler at the SEC (Author – Timothy Massad, FinancialPlanning)

Timothy Massad covers the topic of regulatory reform of money market funds and shares the concern whether SEC Chairman nominee, Gary Gensler, will have money market reform at the top of his priority list. Timothy examines the reasons behind the need for reform amid the pandemic and past economic events.

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Don't forget to check out last week's top RIA compliance news articles that focus on the SEC's ad rule effective date, Form CRS submissions, and a Paycheck Protection Plan (“PPP”) extension act.

Topics: RIA Operations, RIA Compliance, RIA Technology

RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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