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 COMPLY’s new CEO, the SEC’s Marketing Rule Risk Alert, FINRA’s focus on Reg BI, the adopted DOL rule, and proposed global regulations to protect hedge funds.
Here are our top compliance articles as of April 26, 2024:
Compliance software specialist COMPLY names new CEO (Hedgeweek)
“COMPLY, a provider of compliance software, consulting and education resources for the financial services sector including hedge funds and private equity firms, has appointed Michael J Stanton as its Chief Executive Officer.
Stanton succeeds Amy Kadomatsu, who is now transitioning to the role of Board Advisor.”
SEC warns industry against marketing rule pitfalls (Author – Leo Almazora, Investment News)
The SEC’s Division of Examinations has released findings on financial advisers’ compliance with the marketing rule. While many strive to adhere to the guidelines, there are widespread noncompliance issues, including misleading claims and inadequate disclosures. Common shortcomings include vague policies, misleading advertising, and insufficient documentation. The SEC emphasized the need for firms to improve compliance and has prioritized enforcement of the marketing rule.
FINRA Is Stepping Up Reg BI Actions, Enforcement Chief Says (Author – Melanie Waddell, Think Advisor)
FINRA’s enforcement cases related to Regulation Best Interest are increasing, with more cases in the pipeline covering areas like Form CRS, excessive trading, and variable annuities. Targeted exams may lead to enforcement actions, prioritizing related cases for timely conclusion. FINRA also focuses on social media influencer cases and Consolidated Audit Trail compliance issues.
Global regulators want to bolster hedge fund protections (Author – Bloomberg News, Investment News)
Global regulators proposed measures to enhance hedge funds’ and non-bank investors’ liquidity preparedness during market stress, emphasizing risk management, stress-testing, and adequate collateral. This follows recent non-banking sector shocks highlighted.
“The FSB said funds should conduct liquidity stress tests for a range of “extreme but plausible” scenarios caused by changes in margin calls. Collateral should be held in sufficient quantity after taking account of potential haircuts and be operationally ready for use during times of stress, it said.”
Closing loopholes or blocking access? Reactions to the final DOL rule (Author – Tobias Salinger, Financial Planning)
The Labor Department’s new retirement advice rule has sparked mixed reactions. The regulation expands fiduciary duties for financial advisers, requiring them to prioritize clients’ best interests in rollovers and product recommendations. Supporters include AARP, CFP Board, and NAPFA, praising its protection against excessive fees and risks. Opponents like Insured Retirement Institute and SIFMA criticize its potential to limit advice access and increase costs. Many expect lawsuits challenging the rule’s legality. The rule takes effect on Sept. 23 with a transition period.
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