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Dan Brecher
Counsel
212-286-0747 dbrecher@sh-law.comAuthor: Dan Brecher|July 1, 2015
Dubbed the “Retirement-Targeted Industry Reviews and Examinations Initiative,” the SEC’s targeted examinations of registered investment advisers and broker-dealers will focus on “certain higher-risk areas of registrants’ sales, investment, and oversight processes, with particular emphasis on select areas where retail investors saving for retirement may be harmed.”
The new initiative comes in the wake of the Department of Labor’s (DOL) proposed (and controversial) fiduciary rule that would impose the “best interests of the client” standard on brokers. While supporters of a uniform fiduciary standard for brokers and advisers maintain that the proposed rules will help prevent conflicts of interest, critics argue that the increased liability risk and costs would be unduly burdensome for brokers.
While the SEC has yet to propose its own fiduciary rule, conflicts of interest are of top enforcement priority. According to the SEC’s Risk Alert, the agency is focusing on retirement-based savings “in recognition of the complex and evolving set of factors that retail investors face when making such investment decisions.”
As with all of the SEC’s compliance initiatives, this is the agency’s polite way of saying you’ve been warned. Firms under the SEC’s purview are encouraged to review their practices, policies, and procedures in these areas and make any necessary compliance improvements as soon as possible.
Counsel
212-286-0747 dbrecher@sh-law.comDubbed the “Retirement-Targeted Industry Reviews and Examinations Initiative,” the SEC’s targeted examinations of registered investment advisers and broker-dealers will focus on “certain higher-risk areas of registrants’ sales, investment, and oversight processes, with particular emphasis on select areas where retail investors saving for retirement may be harmed.”
The new initiative comes in the wake of the Department of Labor’s (DOL) proposed (and controversial) fiduciary rule that would impose the “best interests of the client” standard on brokers. While supporters of a uniform fiduciary standard for brokers and advisers maintain that the proposed rules will help prevent conflicts of interest, critics argue that the increased liability risk and costs would be unduly burdensome for brokers.
While the SEC has yet to propose its own fiduciary rule, conflicts of interest are of top enforcement priority. According to the SEC’s Risk Alert, the agency is focusing on retirement-based savings “in recognition of the complex and evolving set of factors that retail investors face when making such investment decisions.”
As with all of the SEC’s compliance initiatives, this is the agency’s polite way of saying you’ve been warned. Firms under the SEC’s purview are encouraged to review their practices, policies, and procedures in these areas and make any necessary compliance improvements as soon as possible.
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