Investment Advisers and Broker-Dealers Regulation - White Papers

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The Dodd-Frank Act, which was enacted in July, 2010, mandated numerous studies, rule changes, and proposed new rules regarding the relationships and responsibilities of investment advisers, broker-dealers, and their clients. A summary, with links to specific topics, studies, and rule proposals, can be found below.

SEC Staff - Study on Investment Advisers and Broker-Dealers

January, 2011

The Dodd-Frank Act required the Securities and Exchange Commission (SEC) to conduct a study to evaluate the effectiveness of existing regulatory standards for investment advice and recommendations to retail customers, and whether there regulatory gaps, shortcomings, or overlaps in these standards. The study outlined the SEC staff findings and made recommendations for potential new rulemaking, guidance, and other policy changes. Staff recommendations include:

  • the adoption of a set of Uniform Fiduciary Standards covering broker-dealer and investment adviser conduct, loyalty, principal trading, investor education, and duty of care; and
  • harmonization of regulations in areas such as advertising and other communications, the use of finders and solicitors by investment advisers and broker-dealers, the use of finders and solicitors by investment advisers and broker-dealers, licensing and continuing education requirements, and book- and record-keeping.
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SEC Staff - Study on Enhancing Investment Adviser Examinations

January, 2011

The Dodd-Frank Act required the Securities and Exchange Commission (SEC) to conduct a study to evaluate the examination and evaluation of investment advisers, dually-registered broker-dealers and investment advisers (“dual registrants”) and registered investment advisers that are affiliated with a broker-dealer, and recommend regulatory steps to address any concerns resulting from the study. The study was organized into five sections:

  • Commission examinations of registered investment advisers;
  • Examinations of registered investment advisers over the past six years;
  • Impact of the Dodd-Frank Act on examinations of registered investment advisers;
  • Options to consider to address capacity constraints concerning examinations; and
  • Three staff recommendations:
    • Authorize the Commission to impose user fees on SEC-registered investment advisers to fund their examinations by the Office of Compliance Inspections and Examinations (OCIE);
    • Authorize one or more self-regulatory agencies (SROs) to examine, subject to SEC oversight, all SEC-registered investment advisers; or
    • Authorize FINRA to examine dual registrants for compliance with the Advisers Act.
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References

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