Compliance innovation moves fast, but the news moves faster. To keep you and your team up to speed on the latest happenings and goings-on in the compliance world, we’ve aggregated the top five articles from the past few weeks to provide you with an in-depth look at the regulatory ecosystem.
Stay up-to-date and in the know on everything happening in the compliance world as of November 10, 2023.
Financial services needs compliance aggregators – Author Nathan Remmes
COMPLY’s Chief Growth Officer Nathan Remmes recognizes the increasing consolidation of the financial services industry and the growing complexity of compliance requirements. This has led to a fragmented and inefficient compliance industry that is costly for many firms.
Compliance aggregators offer a solution to this problem by providing a unified approach to compliance technology and services. This can help firms streamline their compliance processes, reduce risk and save money.
Remmes believes that the compliance industry is ripe for consolidation and that compliance aggregators are best suited to meet the needs of financial services firms in the face of increasing regulatory complexity and consolidation.
The tale of two executive roles in cybersecurity compliance – Author Helen Johnson
COMPLY’s Chief Technology Officer Helen Johnson discusses the convergence of compliance and cybersecurity in the financial services industry. She argues that, in the past, these two functions were separate and autonomous, but that this is no longer the case. New technologies and regulations have blurred the lines between compliance and cybersecurity, and financial services firms now face the challenge of creating teams where both departments collaborate to create a coherent, sustainable and supportive system that protects data and complies with regulations.
SEC highlights exam priorities for 2024 – Author Thomas D. Giachetti
The SEC recently released its 2023 exam priorities. The commission will be reviewing investment advisers’ processes for determining that investment advice is provided in clients’ best interests, as well as marketing materials and safeguarding controls. The SEC will also be focusing on complex products, such as derivatives, leveraged exchange-traded funds (ETFs), variable annuities and nontraded real estate investment trusts (REITs).
The SEC’s 2024 priorities for investment advisers are designed to protect investors and ensure that advisers are acting in their clients’ best interests.
Financial groups ask for more time to comment on DOL fiduciary rule – Author Financial Planning Staff
18 financial services organizations have written to the Department of Labor (DOL) requesting an extension to the 60-day comment period on the agency’s proposed fiduciary rule for retirement advisors.
In the letter, the groups argue that 60 days is not enough time to adequately review and comment on such a complex and important proposal. The groups are requesting that the DOL extend the comment period to at least 120 days. This would give stakeholders more time to carefully review the proposal and provide meaningful feedback.
The DOL has not yet responded to the group’s request. However, it is important to note that the agency is required to give stakeholders a reasonable opportunity to comment on proposed rules. Whether 60 days is considered a reasonable amount of time for this particular proposal is a matter of debate.
Gensler says proposal on AI conflicts aligns with Reg BI – Author Mark Schoeff, Jr.
The SEC’s proposed rule on AI conflicts is not meant to modify Regulation Best Interest (Reg BI), but rather to address the unique risks associated with the use of AI and predictive data analytics in investor interactions.
Chair Gensler assured the audience at the SIFMA conference that the AI proposal is “largely speaking” consistent with Reg BI, and that the agency is not trying to change the fiduciary guidance for investment advisors.
However, Gensler also emphasized that the AI proposal is targeting a specific situation: when predictive data analytics is used to “narrowcast” and “microtarget” investors on product, pricing and communications in a way that optimizes the advisor’s revenue or profits.
Gensler said that this can lead to tilted recommendations and communications, and that the SEC is trying to address this basic issue.