The SEC recently considered a proposal that would prohibit incentive-based compensation practices that may encourage inappropriate risk.
The proposal arises from Section 956 of the Dodd-Frank Act, which requires the SEC along with six other financial regulators to jointly adopt regulations or guidelines governing the incentive-based compensation arrangements of certain financial institutions. These institutions include broker-dealers and investment advisers with $1 billion or more of assets.
In particular, the Dodd-Frank Act calls upon the regulators to do two things: Read the analysis at AdvisorFYI