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The weekly news source for investment management legal and compliance professionals

Topic: Broker-dealers

Clayton and Blass Defend and Seek Input on Proposed Standards of Conduct

May 4, 2018
Proposing new standards of conduct may turn out to have been the easy part. The SEC now has to persuade the asset management community to buy into the proposals.

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SEC Proposes Broker-Dealer Best Interest Standard, Adviser Fiduciary Interpretation

April 20, 2018
The SEC on April 18 laid down its initial markers on the subject of standards of conduct for both broker-dealers and advisers – while making clear that it expects and welcomes changes.

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SEC May Propose Its Own Fiduciary Rule by Second Quarter

January 12, 2018
It’s an ambitious target, but the SEC is reportedly planning to propose a Fiduciary Rule that would cover all brokers – not just those selling retirement accounts – by the second quarter of this year. That could mean that there will be a proposed rule in about 10 weeks, but it could also mean in about five months, depending on whether "by the second quarter" means the beginning or the end of that quarter.

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Adviser and Broker-Dealer Issues Play Out in Latest Share Class Settlement

January 5, 2018
The SEC reached a settlement with a dually-registered advisory firm / broker-dealer that involves the issue of recommending higher-cost share classes of securities to clients when lower-cost share-classes of securities are available. This latest share-class settlement has an added wrinkle in that the firm may have had a conflict of interest because, in its capacity as a broker-dealer, it allegedly received the additional service fee from the purchase of the higher-cost shares.

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Advisers: Beware of Loans Provided by Friendly Broker-Dealers

October 20, 2017
Three settlements issued on the same day concerning the same alleged violation: accepting loans with favorable terms from broker-dealers in exchange for sending business to those same broker-dealers. Sounds like the SEC is sending a message.

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Associations and Firms Want SEC/DOL Coordination on Standard of Conduct

August 18, 2017
More than 90 comments have been received by the SEC to date in response to agency chairman Jay Clayton’s June 1 call for comments in regard to standards of conduct for investment advisers and broker-dealers. Among the trends emerging from the comments received to date is that the SEC, in coordination with the Department of Labor, create a separate standard of conduct for broker-dealers.

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SEC Seeks Updated Assessment on Need for Uniform Standard of Conduct

June 9, 2017
New SEC chairman Jay Clayton dipped his and the Commission’s toe back into the waters of a possible uniform Fiduciary Rule for advisers and broker-dealers. The end result may be a uniform standard of conduct or something else.

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Another Wrap Fee Adviser Settles with SEC Over Tradeaway Disclosures

March 31, 2017
The SEC isn’t letting up in its scrutiny of dually registered advisers/broker-dealers, particularly those offering wrap fee programs that result in clients paying unexpected fees for transactions that are "traded away" to other brokers. It settled two such cases a few months back – and on March 13 settled a new one.

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Examine Adviser-Broker Relationships for Conflicts of Interest

March 24, 2017
One hand washes the other, or so the saying goes. Advisers and brokers washing each other’s hands, though, would be wise to make sure they are not really engaging in what the SEC might label a conflict of interest.

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Dually Registered Advisers/Broker-Dealers Face Dual Examinations

September 8, 2016
The ability to charge both advisory fees and brokerage commissions may seem like a powerful incentive to become a dually registered adviser/broker-dealer, but there are challenges as well. Among them are that dual registrants have to comply with two standards, two sets of regulations, and – perhaps the most problematic – face two sets of examiners, one from the SEC, the other from FINRA.

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Examiners Scrutinize Adviser Relationships with Broker-Dealers

July 28, 2016
Examiners visiting advisory firms spend increasing amounts of their time these days on cybersecurity and other hot topics du jour. But that’s by no means how they spend all their time. They also look into advisory firm bread-and-butter practices, not least among them relationships with non-affiliated broker-dealers.

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Broker Relationships with Advisers Cannot Get in the Way of Best Execution

July 22, 2016
Friendships between advisers and broker-dealers should only go so far. The majority owner of a broker-dealer learned this lesson the hard way last month after he allowed a financially troubled adviser who was also a longtime friend to set commission rates for his advisory clients, according to the SEC.

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Long and Short: SEC Expects Accurate Data from Advisers

July 24, 2015
Next time you report trades to brokers, make certain you correctly characterize them. One firm just settled with the SEC for $4.25 million and was forced to admit wrongdoing in regard to the agency’s allegations of mischaracterizing long and short sales.

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Broker-Turned-Adviser Loses Jury Verdict in Misrepresentation Case

August 22, 2014
Before sounding a siren call to former clients in the hope of luring them to join you at your new firm, make sure those sweet promises won’t also prove irresistible to the SEC.

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Broker-Dealer Registration: Know What's Required Before You Act

March 21, 2014
You know the Robert Frost poem about the person confronted with two paths in a wood and how choosing the less-traveled one made all difference? Advisers facing the choice of whether to register as a broker-dealer should carefully consider what lies ahead before walking down what, for them, will be the less-traveled broker-dealer path.

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SEC Has Its Eye on Broker-Dealers That Register as Investment Advisers

November 8, 2013


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Beware of Finders - SEC Charges Private Equity Firm and Its Consultant with Illegal Capital Raising

April 12, 2013


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Broker-Dealers Can Impose Class Action Waivers in Customer Agreements – For the Time Being

March 5, 2013


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SEC Seeks Data on Uniform Fiduciary Standard and IA/BD Regulatory Harmonization

March 5, 2013


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SEC Sets Compliance Outreach Program for Broker-Dealers in April

February 7, 2013


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