RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of March 27th, 2020

Posted by RIA in a Box

Apr 3, 2020 3:52:52 PM

Top_Compliance_Articles_of_the_week-17Each 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 Securities and Exchange Commission ("SEC") plan to move forward with the Form CRS (ADV Part 3) deadline, advice on how to RIAs can handle the coronavirus disruption, and the incoming surge of Covid-19 cybersecurity threats.

Here's our top investment adviser compliance articles for the week of March 27th, 2020:

Download 10 Tips for Business Continuity and Disruption Planning Checklist

1. SEC Holds Firm on June 30 Reg BI Implementation Date (Author- Patrick Donachie, WealthManagement) 

SEC Chairman, Jay Clayton, confirmed this week that despite the ongoing spread of COVID-19 in the United States the SEC is holding to June 30th as the implementation date for Regulation Best Interest ("Reg BI"). According to the post by Patrick Donachie, "Clayton asserted that in the 10 months since June 2019, when Reg BI was approved, the SEC has worked with broker/dealers, advisors and other regulatory agencies like FINRA to help them adjust business practices, modify policies and align operations to comply with Reg BI and submit a Form CRS to the commission by June 30. Clayton cited this engagement (and Reg BI’s potential impact on retail investors) as a reason to stick to the original date."

2. Advice on How to Prep for COVID-19 Disruptions (Author- Jeff Berman, ThinkAdvisor)

At the beginning of this week, Jeff Berman summarized the important points of president of RIA in a Box GJ King’s “How RIA Firms can Prepare for the Coronovirus” webinar that firms and advisers should keep in mind. The main focus of King’s webinar was not only the COVID-19 crisis itself, but the several other factors that have sprung up due to this unique situation. Not only do advisors need to take care of and reassure their clients in this volatile market, but also look after the well-being and safety of their employees and themselves. “It is important for those running RIA firms to make sure their business continuity plans address their communication strategies, regulatory considerations, tech stacks and cybersecurity”, King explained.

         3. State regulators say they’re not missing an oversight beat  (Author - Mark Schoeff Jr., InvestmentNews)

Over the last few weeks, the North American Securities Administrators Association (“NASAA”) has been surveying its members to gain a better understanding of how firms and advisers are faring with these unique circumstances. Regulators from different states are reporting positive outcomes of moving to strictly remote work as well, and “more than 30 states have extended certain deadlines and provided other temporary relief, Melanie Lubin, Maryland Securities commissioner, said in March 25 testimony before the Financial Stability Oversight Council. NASAA provides on its website a list of states that have taken steps to ease regulatory requirements in response to the disruption caused by the coronavirus”, Mark Schoeff Jr. stated.

         4. Should fee-based advisers take stimulus loans? (Author- Jeff Benjamin, InvestmentNews)

Jeff Benjamin discusses the $2.2 trillion stimulus package that passed in Washington D.C. last week and what it means for financial advisers. Benjamin touches on information shared by Live Oak Bank, the nation’s leading Small Business Association (“SBA”) lender, which states that the stimulus package provides two different options for advisers. The first being that “existing SBA loans will be eligible to have the principal and interest paid by the government for up to six months”. The second option is geared towards advisers who have yet to take out a loan, and “involves access to SBA loans equal to 2.5 times a business’ monthly payroll expense, which is part of the stimulus package’s Payment Protection Plan.”

           5. Surge in Coronavirus Scams is Coming Securities Regulators Warn (Author - Melanie Waddell, ThinkAdvisor)

Unfortunately, there will always be bad actors who look to take advantage of the misfortune of others. Melanie Waddell warns of the incoming influx of cybersecurity threats and scams as a result of the COVID-19 pandemic. Joe Rotunda, vice chair of the North American Securities Administrators Association’s (“NASAA”) Enforcement Sections, sheds light on the situation, “Scammers’ products and tactics will track recent economic and social trends, promising lucrative returns to retail investors concerned about their investments and retirement plans. Retail investors must remain vigilant to protect themselves from these schemes.”

Contact RIA in a Box to create your firm's Form CRS

Don't forget to check out last week's top RIA compliance news articles focusing on the SEC's COVID-19 relief, increased cybersecurity risks, and compliance challenges with remote work.

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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