Wealth & Risk Management Blog

William Byrnes (Texas A&M) tax & compliance articles

Posts Tagged ‘Mary Schapiro’

SEC Softening its Stance on Private Placements

Posted by William Byrnes on September 26, 2011


The Obama Administration’s 2012 federal budget proposal has revived two budget proposals that recent scandals have directed a slew of regulatory attention on private placement. Considering examinations of private placements recently being characterized by a FINRA executive as a “major, major initiative, it would seem strange for the Securities and Exchange Commission (“SEC”) to consider relaxing rules for marketing private placements.

Nevertheless, that’s exactly what SEC Chairman Mary Schapiro told members of Congress the agency is planning.

Speaking before the U.S. House of Representatives Committee on Oversight and Government Reform, Shapiro said that the SEC is going to “take a fresh look” at rules relating to private placements and other securities offerings, both public and private. Specifically, she said that the agency will reconsider the private placement public marketing ban and the 500-investor threshold that categorizes a company as “public.”

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of private placements in Advisor’s Journal, see Private Placements Becoming Much Riskier for Firms (CC 11-78) and Private Placements Becoming Much Riskier for Firms (CC 11-78).

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FINRA Plans New Power Grab as SEC Falters

Posted by William Byrnes on August 2, 2011


FINRA is continuing its recent power-grab in the face of a largely impotent and underfunded Securities and Exchange Commission. As the next stage in an increasing series of regulations and information reporting requirements, plans are in the works for a new-and-improved examination program that could further increase the information reporting requirements of member firms and significantly increase their compliance burden.

Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of FINRA regulatory action in Advisor’s Journal, see Broker Bonus Arbitration Bottleneck Forces FINRA to Reconsider Arbitrator Qualification Standards (CC 11-08),  SEC Approves FINRA Suitability and Know-Your-Customer Rules (CC 11-17), & New FINRA Rule Restricts Brokers’ Outside Business Activities (CC 10-110).

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SEC Unprepared to Implement the Fiduciary Standard for Broker-Dealers

Posted by William Byrnes on March 28, 2011


Broker-dealers will be subject to a fiduciary standard of care no earlier than the second half of 2012, predicts Richard Ketchum, Chairman and CEO of the Financial Industry Regulatory Authority (“FINRA”).  Mr. Ketchum’s remarks come a week after SEC chairman Mary Schapiro said that the SEC has “a lot of work to do” before putting “pen to paper” and writing the fiduciary standard rules.

Causes of the delay were hinted at by a pair of reports issued by the SEC last month, one of which concluded that broker-dealers and registered investment advisers (“RIA”) should be subject to the same fiduciary standard of care. The other report provided recommendations for improving the examination of investment advisors, concluding that a Self-Regulatory Organization (“SRO”) should be appointed to conduct examinations of investment advisors. An SRO is a private organization that is granted some regulatory authority over a particular industry. SROs are typically funded by member user fees.  Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of the fiduciary standard in Advisor’s Journal, see SEC Fiduciary Standard Study Answers Few Questions (CC 11-25)Study Finds that Universal Fiduciary Standard Will Hurt Investors (CC 10-97) and What You Don’t Know Yet Might Hurt You: A Broker’s Duties under the Financial Reform Act (CC 10 40)

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Advisors Hit with Another Round of SEC Reporting Rules

Posted by William Byrnes on March 21, 2011


Do small- to medium-sized advisors represent a threat to the systemic integrity of the worldwide financial system? Probably not, but you’d think so based on the flood of advisor regulations flowing out of Washington.

The Dodd-Frank compliance maze expanded again last week as the SEC commissioners voted unanimously to release proposed reporting requirements that will complicate the compliance landscape for many advisors. Although affected advisors are not among the largest advisors overseen by the SEC, they are nevertheless categorized by the Commission as large enough to represent a systemic threat warranting increased SEC attention.

And while the SEC has assured affected advisors that their proprietary trading strategies won’t become part of the public record, recent events like the Wikileaks private banking releases should spook advisors.  Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

For previous coverage of recent SEC rulemaking activity in Advisor’s Journal, see SEC’s Plain English Requirement Equals Expensive Client Disclosures(CC 10-44) and SEC Approves FINRA Suitability and Know-Your-Customer Rules (CC 11-17).

 

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SEC Approves FINRA Suitability and Know-Your-Customer Rules

Posted by William Byrnes on February 26, 2011


The SEC recently approved FINRA proposed rules—FINRA Rules 2090 and 2011—that amend and consolidate know-your-customer and suitability obligations for broker-dealers and their authorized representatives.  The new rules are based on, and replace in-part, similar NYSE and NASD rules. According to FINRA, the amended know-your-customer and suitability rules are intended to protect investors by “promoting fair dealing with customers and ethical sales practices.”

The new rules are effective as of October 7, 2011.  For previous coverage of the suitability standard and the debate over the proposed fiduciary standard in Advisor’s Journal, see What You Don’t Know Yet Might Hurt You: A Broker’s Duties under the Financial Reform Act (CC 10-40) and Study Finds that Universal Fiduciary Standard Will Hurt Investors (CC 10-97).

Under the know-your-customer rule, firms are required to use reasonable diligence respecting the opening and maintenance of every account and to know essential facts about every customer. “Essential facts” are facts required to …. Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

 

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