What’s the latest news in the world of regulatory compliance? Welcome to our biweekly recap, where we give you our report highlighting 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 the publication of the 2024 Investment Adviser Industry Snapshot, a notice from FINRA regarding Regulation S-P, a look at whether investors trust AI, and more.
Here are our top compliance articles as of June 21, 2024:
2024 Investment Adviser Industry Snapshot Shows Increase in Demand for Adviser Services (Author – The Investment Adviser Association)
The 2024 Investment Adviser Industry Snapshot has been published and highlights an evolving industry. The number of SEC-registered investment advisers hit a record 15,396 in 2023, with 56.7 million clients and $128.4 trillion in assets under management.
The report by the Investment Adviser Association and COMPLY highlighted the industry’s growth, with small advisers making up most new registrations and significant regulatory changes on the horizon. The full report is available on the IAA and COMPLY websites.
Mind SEC’s new data breach rules, says Finra (Author – Leo Almazora, Investment News)
FINRA urges member firms to comply with new SEC rules enhancing data breach protections under amended Regulation S-P. The rules mandate incident response programs, prompt notification of affected individuals, oversight of service providers, and expanded safeguards for customer information. Firms must comply within 18-24 months based on their size, with larger firms having a shorter timeframe.
Do investors trust AI with financial statements? FINRA Foundation study offers some surprises (Author – Rachel Witkowski, Financial Planning)
Despite AI’s capabilities, consumers trust human financial professionals more, especially for financial decisions, according to a FINRA survey of over 1,000 adults. Only 5% would use AI, compared to 63% preferring human advisors. Generational differences may affect AI adoption, with 10% of young adults using AI for financial information. Combining AI’s speed with human insight could enhance advisor-client relationships.
“A Financial Planning survey of financial advisors performed earlier this year found that about half of the 127 respondents said they’d trust AI to be responsible for making predictions on their car or house maintenance needs, but only 15% said they’d trust it to make financial recommendations.”
SEC’s Crypto Enforcement Chief Steps Down (Author – Melanie Waddell, Think Advisor)
David Hirsch, the SEC’s head of crypto enforcement, has resigned after nine years. He expressed pride in leading the Crypto Assets and Cyber Unit and looks forward to new challenges.
“During that time I had the opportunity to work on more complex, challenging investigations and issues than I ever imagined when I joined the agency as a staff attorney in the Fort Worth Regional Office,” he said early Monday morning in a LinkedIn post. ”I’m particularly proud of the historic work done by the Crypto Assets and Cyber Unit team I had the privilege to lead.”
Court Adopts SEC’s Expansive View of ‘Dealer’: SEC Roundup (Author – Nick Morgan and Tom Zaccaro, Think Advisor)
In SEC Roundup, Marc Indeglia discusses the 11th Circuit’s agreement with the SEC on who qualifies and therefore must register.
“The 11th Circuit has now twice agreed with the SEC’s position that registration is required for those who purchase convertible debt from public companies, convert into common stock and sell into public markets.”
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