RIA Compliance and Practice Management Blog

Top RIA Compliance News Articles for the Week of May 15th, 2020

Posted by RIA in a Box

May 22, 2020 2:34:09 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's ("SEC") plans for remote work and Form CRS exams, compliance solutions for Chief Compliance Officers ("CCOs"), and how advisors can use video.

Here's our top investment adviser compliance articles for the week of May 15th, 2020:

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1. SEC Reg BI, Form CRS Exams to Start in July (Author - Melanie Waddell, ThinkAdvisor)

According to John Polise, Associate Director of the Broker-Dealer and Exchange group within the agency’s Office of Compliance Inspections and Examinations, “the SEC will begin the exam process by conducting phase exams so that our examiners can become conversant with what they’re seeing and report back to the commission on any issues or themes.” Gradually, throughout the year firms should be prepared for standalone Reg BI and Form CRS exams as well as regular exams incorporating oversight of the two. The compliance date for Reg BI and Form CRS has been set at June 30, 2020. FINRA will be working hand in hand with the SEC to ensure that the industry is receiving proper guidance.

2. Giving CCOs the Help They Need (Author - Mark S. Alcaide, WealthManagement) 

Due to the current climate of COVID-19, compliance teams are seeing regulatory landscape shifts that are causing great demand and risk ultimately effecting business continuity plans. The article states “Given the volatility in the markets, when the whole world is focused on their investment risk, it becomes easy to overlook the regulatory risks.” Many firms are adding additional specialized consultants and compliance solutions to ensure that regulatory guidelines are met. The SEC emphasized the importance of effective staffing and having an adequate system of follow-up and review.

         3. SEC should accelerate its late leap to electronic delivery (Author - Paul Atkins, InvestmentNews)

Electronic modes of communication have become essential amidst the COVID-19 pandemic. We are seeing businesses across all industries transitioning to the new “normal” of e-everything. The SEC proposed the DOL rule which is “expected to give plan fiduciaries flexibility to establish electronic delivery as the default method for communicating with and delivering plan information to their 401(k) or similar plan participants.” The federal government recognizes the benefits of e-delivery which has prompted the DOL rule approval by the Office of Management and Budget this week. Due to a prolonged compliance date the DOL rule will not go into effect until 2021.

         4. SEC will watch Wall Street from home at least through mid-July (Author- Ben Bain, Financial Planning)

SEC Chairman Jay Clayton announced to employees last week that for the majority of employee’s, telework will remain mandatory until at least July 15th. As quoted by Ben Bain, Clayton states, “We do not have a crystal ball… To provide as much information as I reasonably can, without promising something I may not be able to deliver, I expect any change in operational posture after July 15 will be gradual and driven by the needs of the agency, the circumstance of the individual and, most importantly, health and safety guidelines.” The SEC will continue to hold meetings and conduct examinations virtually.

           5. 3 Ways Advisors Can Succeed With Video (Author - Megan Carpenter, ThinkAdvisor) 

A recent poll during a ThinkAdvisor webinar revealed that less than 40% of advisors have shifted to meeting with clients via video platforms due to COVID-19.  This number is significantly lower compared to other professionals who have significantly increased their number of online consultations through the pandemic. In this article, Megan Carpenter suggests while advisors may be late to adopting video calls, firms still have a lot of opportunity to engage with clients through video. Carpenter walks through the advantages that video calls can have for investment advisors when implemented effectively. “If advisors want to remain part of their clients’ worlds, they need to deliver it. Video can help,” Carpenter states.

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Don't forget to check out last week's top RIA compliance news articles on the SEC issuing a sweep of public companies who have applied for or received a Paycheck Protection Program ("PPP") loan, the Financial Industry Regulatory Authority's ("FINRA") lack of guidance on branch examinations during COVID-19, and the steps to take to create a succession plan. 

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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