With the recent announcement by the US Securities and Exchange Commission (SEC) that it will hold an open meeting on June 5, 2019, to consider adopting Regulation Best Interest, one of the major issues that the SEC may clarify is its view of whether Regulation Best Interest preempts state securities regulations that impose a fiduciary duty on broker-dealers.
As we count down to this Wednesday’s open meeting in which the US Securities and Exchange Commission (SEC) will consider whether to adopt its proposed rulemaking package relating to the standards of conduct applicable to financial professionals, we are hopeful to receive answers to certain critical questions about the SEC’s proposals.
In a much-anticipated decision, on April 30, 2019, the US Court of Appeals for the District of Columbia Circuit issued its decision in Robare, a case that concerned an investment adviser’s (IA) disclosure of conflicts of interest regarding its receipt of payments from a custodian. The court held that the Commission’s findings of “negligent” violations under Section 206(2) were supported, but the Commission’s findings of “willful” violations under Section 207, based on the same negligent conduct, “are erroneous as a matter of law.”
Regulatory Updates from Jaqueline Hummel at Hardin Compliance Consulting LLC.
- Reg S-P Compliance Violations Spelled out by SEC
- Heads Up! Massachusetts Amended the Data Breach Notification Law
- Ohio Requires Registered Reps and Investment Adviser Reps to Report Elder Abuse
- SEC Issues Digital Asset Analysis and No-Action Letter
- FINRA Issues Guidance for Communications with Customers Regarding Departing Representatives
- Attention Underwriting Syndicate Members who enter into Backstop Agreements
- FINRA Will Permit the Use of Electronic Signatures for Discretionary Accounts
- SEC Issues Guidance on Mutual Fund Reporting Requirements
- Liquidity Risk Management FAQs Updated
- NFA updated its Self Examination Questionnaire to assist firms in preparing for 2-9
- Ever Wonder What Happens if Your Firm Blows the Private Offering Exemption?
- Google Searches and Phone Calls Don’t Count as Extensive Due Diligence
- When Absolute Power Corrupts Absolutely
- FINRA Gives Broker-Dealer an “F” in Email Review
By all accounts, 2019 will see the advancement of a number of fiduciary and best interest investment advice regulations at both the federal and state levels. Firms subject to these regulations will face challenges in dealing with rules that will impose a host of new obligations, and that may overlap and conflict with one another. Eversheds Sutherland has developed a chart that is intended to help firms take stock of the evolving framework and aid firms in putting the pieces together.