The standard-setting and regulatory support organization governed by the chief insurance regulators of all 50 states set today as a deadline for industry comments on the latest draft of a model best-interest suitability standard applying to annuity sales.
Alan Wolper, an attorney with significant experience helping advisers and brokers navigate FINRA and SEC examinations, says the recently published FINRA 2019 priorities list is interesting, but ultimately not all that informative when it comes to helping advisers avoid the most pressing compliance issues.
During a webcast hosted by ACA Compliance Group, Allison Charley, a former SEC examinations office leader, explained the regulator’s internal process for picking audit targets; other speakers noted the SEC’s increased focus on suitability issues and cybersecurity.
In a Q&A with PLANADVISER, Mirella deRose draws on her experience leading FINRA enforcement in describing what she sees as the most important elements of the regulator’s recently published member priorities list for 2019.
According to the SEC, two firms will collectively pay more than $1.8 million for violations related to share class disclosure failures.
The year that was brought significant regulatory developments from the Department of Labor, the Internal Revenue Service, the Securities and Exchange Commission and other government agencies.
The SEC says relationship documentation, portfolio reconciliation, and portfolio compression are important tools for increasing operational efficiency and reducing risk for security-based swaps entities.
For retirement industry fiduciary advisers, the SEC’s introduction in April of a proposed Regulation Best Interest was one of the seminal moments of 2018; the regulation will likely take final form some time in 2019.
Attorneys warn the “other shoe has dropped” in the SEC’s special Share Class Disclosure Initiative—and RIAs that did not self-report potential 12b-1 fee disclosure violations are now being investigated.
SEC examiners are concerned that the way mobile and personally owned communications devices are used by advisers pose challenges in their meeting obligations under the Books and Records Rule and the Compliance Rule.
The SEC says these changes are needed to reduce obstacles to providing research on investment funds, and to harmonize the treatment of such research with research on other public companies.
When the SEC adopted the new Rule 30e-3 earlier this year, creating a new system for electronic delivery of fund information, it also established a transition disclosure period that starts in January, during which "funds that choose to implement the new delivery method for shareholder reports provide prominent disclosures in prospectuses and certain other shareholder documents that will notify investors of the upcoming change in transmission format.”
The committee says the SEC should explicitly explain that Regulation Best Interest is a fiduciary duty shared equally by advisers and broker/dealer to act in their customers’ best interest.
SEC worked with RAND Corporation to test the efficacy of its mock Customer Relationship Summary form, a key part of the broader Regulation Best Interest proposal; the positive findings differ from reports commissioned by investment industry advocacy groups.
“Because funds bear the cost of shareholder report delivery, intermediaries have little incentive to negotiate lower delivery rates with the fulfillment vendor or otherwise control costs,” the Investment Company Institute argues.
The proposal is intended to help investors better understand these contracts' features, fees and risks, and to more easily find the information needed to make an informed investment decision.
Forty percent are waiting for further clarification, Fidelity learned in a survey.
A test of the summary report found more than 90% of mutual fund investors agreed it was enough to help them stay informed and was a document they would be more likely to read than current reports.
The DOL said it is considering regulatory options in light of a 5th Circuit opinion vacating its previous fiduciary rule, and has on its timeline that a final rule will be issued in September of 2019.
While the Securities and Exchange Commission is firmly controlled by Republican-appointed members, the last Obama-era commissioner says she hopes to find room for compromise to address the pressing issues facing U.S. investors.