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 possibility of a Reg BI rewrite, a new fiduciary rule, the Securities and Exchange Commission’s (SEC) rulemaking pace, how RIAs can drive meaningful growth and an update from the North American Securities Administrators Association (NASAA).
Here are our top investment adviser compliance articles for the week of Apr. 21, 2023:
SEC is Mulling Reg BI Rewrite: Lawmaker (Author – Melanie Waddell, Think Advisor)
A lawmaker has called on the SEC to reject calls to rewrite the rule known as Reg BI, which established increased investor protections and a national standard of conduct for broker-dealers (BDs) when making investment recommendations. The lawmaker urged the SEC to focus on robust oversight of the principles in Reg BI as written. Some industry experts have expressed concerns that the SEC may weaken investor protections in Reg BI, while others commend the rule and oppose any changes to it.
DOL to Appeal Rollover Decision; New Fiduciary Rule Expected by End of Summer (Author – Melanie Waddell, Think Advisor)
A recent federal court decision in Florida that struck down the Department of Labor’s (DOL) guidance on rollover advice as fiduciary advice is expected to prompt the DOL to release a new fiduciary definition rule by the end of summer, according to this article. The DOL has filed an appeal against the court decision, but in the meantime, broker-dealers, investment advisers and insurance agents are left with uncertain outcomes for rollover recommendations. The article also states the DOL may propose changes to toughen the requirements of the DOL’s PTE 84-24 for recommendations of annuities for rollovers, potentially imposing more requirements on insurance agents and insurance companies.
Lawmakers Press Gensler Over Climate, Crypto and Rulemaking Pace (Author – Emile Hallez, Investment News)
SEC Chair Gary Gensler faced questioning from the House Financial Services Committee over the pace of the agency’s rulemaking. Republicans criticized the SEC’s proposed climate disclosure rule for public companies and its regulation of digital assets. Gensler emphasized the SEC’s authority to oversee the crypto markets and defended the agency’s pace of rulemaking, stating that the comment periods average about 70 days and that it takes at least a year for rules to be published in final form.
RIA Edge Podcast: Megan Carpenter’s Playbook for RIAs to Drive Meaningful Growth (Author – Mark Bruno, WealthManagement.com)
The financial advice industry is experiencing a bull market despite bearish conditions in the markets. Megan Carpenter, CEO and founder of FiComm, shares insights on the RIA Edge podcast about how registered investment advisors (RIAs) can effectively capitalize on this opportunity by implementing a strategic marketing plan. Topics discussed include the mindset of successful RIAs, the digital marketing strategies that have led to growth for some firms, benchmarks for healthy organic growth rates and resources for advisers to educate themselves on marketing options and innovations.
NASAA Clears Way for 5-Year Breaks From Industry, Adds Guam (Author – Melanie Waddell, Think Advisor)
NASAA has adopted two new rules. One allows states to permit investment adviser representatives (IARs) to leave the securities industry for up to five years while maintaining their exam qualifications, provided they complete certain continuing education requirements. The second rule amends NASAA’s Uniform Application to Register Securities (Form U-1), requiring issuers to deliver certain proxy solicitation materials to states within two business days after submitting them to the Securities and Exchange Commission, giving state securities regulators visibility into potential investor protection risks. NASAA has also admitted Guam’s securities regulator to the association, making it the first new member since 2005.
Don’t forget to check out last week’s top RIA compliance news articles recapping on tips RIA firms can implement to increase their organic growth, the SEC’s new proposed cybersecurity rule and more.