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 Reg BI, controversy surrounding the proposed DOL rule, spot ETFs, the SEC regulation of private funds, and the SEC pausing its climate disclosure rule.
Here are our top compliance articles as of April 12, 2024:
Reg BI to Be 2025 SEC Exam Priority (Author – Melanie Waddell, Think Advisor)
In 2025, the Securities and Exchange Commission (SEC) will prioritize compliance with Regulation Best Interest (Reg BI) in examinations, focusing on complex or illiquid products. Rina Hussain, associate director of the SEC’s broker-dealer exam program, emphasized this priority at a conference. Richard Best, director of the Division of Examinations, highlighted increased issuance of risk alerts and adjustments in timing for releasing priorities. Vanessa Horton, co-national associate director of the investment advisor exam program, discussed ongoing priorities including cyber, marketing, valuations, and derivatives. The SEC is preparing to release its 2025 exam priorities early in the year.
Don’t repeat 2016 fiduciary rule mistake, NAIFA urges DOL (Author –Leo Almazora, Investment News)
The National Association of Insurance and Financial Advisors opposes the Department of Labor’s fiduciary rule proposal, fearing it could limit access to financial advice for low- and middle-income Americans. CEO Kevin Mayeux argues the rule might push professionals towards fee-for-service models, disadvantaging non-high-income individuals. He highlights existing regulations like Regulation BI and state standards for annuity transactions as sufficient consumer protections. Mayeux emphasizes NAIFA’s commitment to client interests and worries about the rule’s potential impact on racial wealth disparity.
SEC pauses climate disclosure rule (Author – Michael Cohn, Financial Planning)
The Securities and Exchange Commission (SEC) has halted the implementation of a rule mandating climate disclosure. The decision comes amid concerns about the potential costs and complexity associated with such requirements. The SEC aims to reassess the rule’s necessity and implications, reflecting a broader debate over how extensively companies should disclose their environmental impacts. This pause underscores the regulatory challenge of balancing transparency with practicality in addressing climate-related concerns within the financial sector.
SEC seeks input on spot ether ETFs, whose future is hardly certain (Author – Emile Hallez, Investment News)
Three spot-price ether ETFs proposed by Fidelity, Bitwise, and Grayscale are undergoing public comments following exchanges’ filings with the SEC. These ETFs would require approval for listing-rule changes, similar to recent approvals for Bitcoin ETFs. Despite the popularity of Ethereum, mainstream investor access remains limited, prompting interest in ETFs to provide exposure. Financial advisors express interest in crypto for clients, with ETFs offering a simpler and potentially safer option.
“With the first spot-bitcoin ETFs now on the market, attention has turned to a similar treatment for ether, and the SEC could potentially approve products as soon as next month. However, the regulator could easily deny applications and prolong the approval process.
Given the early success of the bitcoin products, which have attracted tens of billions in sales since their recent launch, asset managers appear to see a related opportunity with ether.”
They’re coming for the RIAs: Latest SEC messaging sting nabs small firm (Author – Dan Shaw, Financial Planning)
The SEC conducted examinations of registered investment advisers (RIAs) to assess compliance with messaging regulations, highlighting the SEC’s scrutiny of RIAs’ electronic communications. The operation aims to ensure compliance with regulations regarding client communications, underscoring the SEC’s commitment to enforcing transparency and investor protection. This incident serves as a reminder for RIAs to maintain compliance with messaging protocols to avoid regulatory repercussions.
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