Welcome to our biweekly recap, where we compile the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to regulatory compliance, industry news, and critical updates.
Today’s recap focuses on what’s to come for the DOL Fiduciary Rule, the new AML Rule for investment advisers, the pace of crypto adoption, a look at the recent headline-making enforcement actions regarding off-channel communications, and the passing of a new rule allowing brokers to keep home office addresses private.
Here are our top compliance articles as of August 30, 2024:
Battle Over New DOL Fiduciary Rule Has Just Begun (Author – Melanie Waddell, Think Advisor)
The news article highlights the lengthy process sure to come following the stays placed on the DOL’s Fiduciary Rule as well as multiple exemptions. The legal process, which could potentially end up in the Supreme Court, may also be impacted by the coming election.
‘“The courts are already starting to talk to the parties about what comes next. DOL has the right to appeal the stay, if they want to, and try and ask the Fifth Circuit [Court of Appeals] to overturn it,” [Brad] Campbell [partner at Faegre Drinker] said. “Or, they [DOL] can continue and go into the merits litigation.”’
Treasury Loosens Final Anti-Money-Laundering Rules for Investment Advisers, Real-Estate Agents (Author – Dylan Tokar, Wall Street Journal)
“The Treasury Department moved to complete regulations that extend anti-money-laundering measures to certain investment advisers and real-estate professionals, but said it was loosening the requirements after feedback from the two industries.
The rules, published in final form on Wednesday, seek to address what the Biden administration and others have characterized as critical gaps in the U.S. financial system’s safeguards through which criminals and other nefarious actors can move illicit money.”
Crypto adoption grows among brokerages, but regulators remain skeptical (Author – Rachel Witkowski, Financial Planning)
In a recent analysis, FINRA found that 390 firms currently participate in the crypto market in some capacity. The survey, which analyzed 600 firms, highlighted the increasing market adoption of cryptocurrencies as an investment type.
“Whether the regulators are actually growing comfortable with crypto, however, is debatable. Both FINRA and the U.S. Securities and Exchange Commission (SEC) have spent years gathering information to identify where crypto assets fit in the securities space and how to oversee crypto, while also mounting enforcement actions.”
SEC’s landmark recordkeeping action could ‘embolden examiners’ (Author – Leo Almazora, Investment News)
“As a result of the crackdown, the firms have agreed to pay a collective $393 million in penalties, building on the SEC’s $81 million penalty haul in February against 16 firms that committed similar violations.”
One of the cases highlighted in the article was brought as a result of a “routine exam.” While it was found that the firm did have appropriate Policies and Procedures in place, the firm lacked proper processes to identify when and if employees were abiding by the firm’s set policies, resulting in the subsequent enforcement action.
Brokers can keep home office addresses private, FINRA says (Author – Dan Shaw, Financial Planning)
“FINRA has quietly and quickly won approval for a rule that lets brokers keep their private addresses off the online BrokerCheck database with a simple check of a box.
With the lapse this year of an emergency rule adopted during the COVID-19 pandemic, many firms have been scrambling to register remote offices they opened in the past four years. That, in turn, has stoked anxieties that advisors’ private home addresses will start appearing in the public online database known as BrokerCheck.
But many of those fears have been put to rest by a rule put forward on June 27 by the Financial Industry Regulatory Authority, the broker-dealer industry’s self-regulator. Now firms can simply check a box on office-registration documents to keep their personal addresses out of the public eye.”
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