Each Friday, we are giving you our weekly report highlighting the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to registered investment adviser (RIA) compliance and regulatory issues. This week’s recap focuses on the importance of having written policies and procedures for safeguarding client records, wealth management industry conferences you should attend this year, the impact of AI on cybersecurity and a new e-delivery bill being passed.
Here are our top investment adviser compliance articles for the week of Apr. 28, 2023:
Branch Offices Lack Policies for Protecting Client Records: SEC (Author – Melanie Waddell, Think Advisor)
The Securities and Exchange Commission’s Division of Examinations issued a risk alert warning broker-dealers and advisers about the need for written policies and procedures to safeguard client records and information at branch offices. The agency noted that many firms have experienced cybersecurity and data breaches due to a lack of safeguards in branch offices, despite implementing such policies at their main office. The SEC emphasized that firms must adopt written policies and procedures that address administrative, technical and physical safeguards to protect client records and information, as required by the Safeguards Rule of Regulation S-P.
M&A Boom Drives SEC Concerns About Planners’ Branch Offices (Author –Dan Shaw, FinancialPlanning)
In another article on this key risk alert, Dan Shaw highlighted the SEC’s findings that although brokers’ and advisers’ main offices are doing a good job of protecting client information, the same cannot be said for their branch offices. The alert urges firms to extend their cybersecurity policies and procedures to their branches to safeguard customer data. This move indicates that the financial industry is still grappling with the implications of remote work, which became widespread during the COVID-19 pandemic
Guide to Industry Conferences: Compliance, Governance and Regulatory (Author –Chris Latham, Wealth Solutions Report)
WSR has launched a new guide to industry conferences in the wealth management sector. The guide covers key events and topics, including the FINRA Annual Conference, the ComplyConnect Conference & Expo, the MarketCounsel Summit, the FSI Forum & Capitol Hill Day and FSI OneVoice.
The events will feature speakers from regulatory bodies, industry leaders and technology experts discussing topics such as cybersecurity, ESG, private funds and compliance solutions.
AI’s Effects on Cybersecurity Concern U.S. Officials (Author –James Rundle, The Wall Street Journal)
According to senior U.S. cybersecurity officials, the benefits and drawbacks of artificial intelligence are yet to be fully understood, and businesses that hastily adopt new AI models to keep up with current trends could be exposing themselves to potential risks. According to Eric Goldstein, executive assistant director for cybersecurity at the U.S. Cybersecurity and Infrastructure Security Agency, “There is a wide breadth of risks plus benefits with AI.”
House Panel Passes E-Delivery Bill (Author – Melanie Waddell, Think Advisor)
The House Financial Services Committee passed the Improving Disclosure for Investors Act, which requires the SEC to permit financial firms to deliver regulatory documents to investors through electronic means. The Investment Company Institute and Fidelity Investments both expressed support for the bill, stating that e-delivery will make disclosure more effective and improve the retail investment experience for millions of Americans.
.
Don’t forget to check out last week’s top RIA compliance news articles recapping a new fiduciary rule, the SEC’s rulemaking pace and more.