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 DOL Rule, the SEC ESG Rule, and compliance in the time of AI.
Here are our top compliance articles as of May 10, 2024:
Rule check: All you need to know about DOL’s retirement regulation (Author – Tobias Salinger, Financial Planning)
The Labor Department’s new retirement advice rule faces debate over potential savings versus compliance costs. Morningstar projects $87.5 billion in investor savings over a decade, justifying $3.5 billion in expenses. Opponents, like Oxford Economics, estimate industry costs exceeding $25 billion, prompting questions about the rule’s necessity. Arguments vary on its impact and necessity.
New DOL Fiduciary Rule Hit With First Lawsuit (Author – Melanie Waddell, Think Advisor)
The Federation of Americans for Consumer Choice and independent insurance agents filed a lawsuit against the Labor Department over its new fiduciary rule, seeking to stop its implementation. The lawsuit argues that the rule broadens the definition of an investment advice fiduciary and conflicts with prior court rulings.
“FACC’s new suit states that Labor “promulgated a new rule that purports to redefine and significantly broaden who is considered an ‘investment advice fiduciary” under the Employee Retirement Income Security Act.”
AT Think SEC climate rule has wide implications (Author – Bill Harter, Financial Planning)
The Securities Exchange Commission (SEC) announced its final rule on climate-related disclosures in early March, aiming to provide investors with consistent, comparable information and issuers with clear reporting requirements. Compliance phases start in 2025 for large filers and require disclosure of Scope 1 and 2 greenhouse gas emissions, omitting Scope 3, though it remains relevant due to state and international regulations. Business leaders must prioritize data accuracy and completeness to navigate evolving ESG reporting requirements effectively.
Enhancing firm-level advisory compliance in the age of AI (Author – Harriet Christie, Financial Planning)
FINRA’s 2024 oversight report emphasizes AI and cybersecurity concerns, urging proactive surveillance of advisory firms to prevent improper communications. It cites SEC fines for off-channel texting, urging firms to monitor all correspondence thoroughly. The report stresses compliance teams’ role as detectives and addresses AI’s emerging risks, underscoring the need for accurate, balanced messaging amid technological advancements.
“Rather than expecting employees to simply follow protocol, the report indicates that compliance teams are expected to do the detective work to understand the new landscape and make sure employee conduct is aboveboard. FINRA recommends that firms keep an active eye on whether approved channels are underutilized, signifying that alternatives are being used.”
FINRA Files to Extend CE Deadlines for Brokers on a Break (Author – Melanie Waddell, Think Advisor)
FINRA proposes extending deadlines for brokers enrolled in MQP in 2022 and 2023, allowing completion of continuing education between May 22 and July 1, 2024. Those who completed CE between March 31 and May 22 will be considered compliant. MQP helps maintain qualifications for up to five years. Over 900 returned to the industry via MQP.
Have questions? Schedule time to speak with an expert today!