All posts by Clifford E. Kirsch

With more than 25 years of experience, Cliff regularly counsels clients on the design and distribution of investment products including wrap-fee programs and other advisory products, mutual funds, bank collective investment funds and insurance products. He also focuses on issues related to the design and implementation of compliance programs at financial services firms.

Caveat Compliance: Can Firms Rely on Advice Received from Compliance Consultants?

Broker-dealers (BDs) and investment advisers (IAs) regularly hire compliance consultants to obtain advice about regulatory requirements. A recent Securities and Exchange Commission (SEC or Commission) enforcement proceeding against an investment adviser (IA) calls into question whether firms may rely on compliance consultants as a defense to violating the law.  However, if firms take proper steps, BDs and IAs may still be able to retain consultants and defend themselves based on the advice they receive. Otherwise, “caveat emptor” (as the saying goes) or “caveat compliance” (as the SEC seems to be saying).

Read More Here

Additional contributors to this post:

Brian L. Rubinbrianrubin@eversheds-sutherland.com

Rebekah R. Runyonrebekahrunyon@eversheds-sutherland.com

The Final Rule: Delayed But (Perhaps) Not Denied

On April 4, 2017, the Department of Labor released its final rule postponing the applicability date of its new “investment advice” fiduciary definition and related exemptions. This extension, which was published in the April 7 Federal Register, generally delayed the applicability dates under the rule for 60 days, until June 9, 2017, and also modified limited but important conditions in the rule for 2017.

Read More Here

Additional contributor to this post:

W. Mark Smithmarksmith@eversheds-sutherland.com

BICE on Ice? Status of the DOL Fiduciary Rule

With recent developments in all three branches of government bearing on the authority and timing of the new DOL final rule expanding the definition of fiduciary “investment advice” for purposes of ERISA, the already formidable challenges for plan sponsors and retirement product and service providers have been made more difficult.

Read More Here

Additional contributor to this post:

W. Mark Smithmarksmith@eversheds-sutherland.com

 

FINRA Focus: What Happened With Restitution in 2016?

Evershed Sutherland’s annual analysis of FINRA’s  disciplinary actions indicates that FINRA fined firms and individuals a record-setting $176 million in 2016.. In addition, it ordered $28 million in restitution in 2016.

But. . .

  • How did 2016 compare to previous years, including 2015’s record-breaking year?
  • What types of cases triggered orders of restitution from FINRA in 2016?
  • What should firms expect in 2017?

View the analysis here

Additional contributor to this post:

Brian L. Rubinbrianrubin@eversheds-sutherland.com

SEC Guidance on Robo-Advisers

The SEC staff’s recent guidance on robo-advisers is the most comprehensive SEC guidance to date concerning the considerations robo-advisers should keep in mind in meeting their legal obligations under the Advisers Act. The staff notes that robo-advisers, like all registered investment advisers, are subject to the substantive and fiduciary obligations of the Advisers Act. The staff further  indicates that because robo-advisers rely on algorithms, provide advisory services over the internet, and may offer limited, if any, direct human interaction to their clients, their unique business models may raise certain considerations when seeking to comply with the Advisers Act.

Continue reading SEC Guidance on Robo-Advisers