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The weekly news source for investment management legal and compliance professionals

Topic: Broker-dealers

Adviser Association Finds Recent Testing of Proposed Form CRS ‘Flawed’

December 7, 2018  The Investment Adviser Association is not happy with the recent testing of the SEC’s proposed Form CRS. In a December 6 statement, the IAA said that the testing of the relationship summary form, conducted by the Rand Corporation at the agency’s behest, “is substantially flawed and does not provide a reasonable basis for adopting Form CRS as proposed.”
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Form CRS: Investor Survey Finds Overall Satisfaction, but Improvements Needed

November 16, 2018  Form CRS, like a number of the SEC’s standards of care proposals, has run into significant industry criticism, but the Commission may take some satisfaction from a recent investor survey finding that nearly 90 percent of respondents said that the form would help them make more informed decisions about investment accounts and services.
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Study from AARP and Other Groups Finds SEC’s Proposed Form CRS Confusing

October 5, 2018  The SEC proposed Form Customer Relationship Summary to make the differences between advisers and broker-dealers easier for retail investors to understand – but it may not be passing that test. Three major consumer groups – the AARP, the Financial Planning Coalition and the Consumer Federation of America – in their comment letter to the SEC revealed that an independent study of investors “indicate the need for the Commission to revise and retest the content, language and format of the CRS.”
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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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