Welcome to our biweekly recap, where we curate the top compliance news and insights from various industry publications. We have selected the most relevant and important updates related to regulatory compliance, industry news, and critical updates.
Today’s recap focuses on consolidation with the RIA industry, crypto regulations, ICI seeking support from president-elect Trump, and FINRA member fees increasing.
Here are our top compliance articles as of November 22, 2024:
How consolidation is testing fiduciary duty in RIAs (Author – Tobias Salinger, Financial Planning)
“For RIAs, though, the deal represented only the latest in a continuing series of M&A deals of dizzying size and volume that raise questions about whether the consolidation into mega-firms rivaling the scale of the brokerages runs counter to putting clients’ best interest first. In other words, RIAs are trying to figure out where the industry’s gospel of accelerating growth runs headlong into the supposedly sacred responsibilities of financial planners.
The mega-RIAs argue their dominance ultimately serves the clients through lower costs and efficient operations. Others point out the sheer pace of change folding small businesses into giant brands that generate billion-dollar valuations and the potential conflicts of interest and clunky procedures resembling those of, well, big financial firms.”
Crypto legislation likely coming under Trump, ex-SEC chief says (Author – Douglas Gillison and Chris Prentice, Reuters)
According to Jay Clayton, the industry is likely to see crypto regulation come to fruition under President-elect Donald Trump.
“I think we will see crypto legislation,” Clayton told a gathering of securities lawyers in New York. “I think it becomes much easier to have crypto legislation if you’re tackling some of these problems that can be tackled at the executive and the administrative level.”
Clayton also commented on additional differences between the Trump and Biden administrations, highlighting “corporate disclosures of climate transition costs.”
ICI seeks Trump’s support for investment rules revamp (Author – Leo Almazora, Investment News)
ICI has made a formal request of President-elect Trump, urging for his long-promised regulatory leniency to include:
- Updating the Investment Company Act of 1940 intended to support mutual funds, exchange-traded funds, and other registered investment products
- Cutting taxes
- Fostering innovation in the financial sector
ICI is one of many industry groups to call for such pushback on regulatory powers and agenda items.
FINRA eyes member fee increases to combat budget deficits (Author – Dan Shaw, Financial Planning)
FINRA has proposed a new plan which would increase member firm fees across the board. The plan awaits SEC approval, however, should it pass, increases would include:
- Large brokerages with 500 or more registered representatives will be paying an additional $415,000 annually
- Midsize firms, with between 151 and 499 representatives (constituting 6.4% of FINRA members), are expected to see an $82,500 increase
- [Firms with] 150 or fewer representatives, the annual cost is expected to rise by $4,135
- Firms with 10 or fewer registered representatives…[annual cost is] expected to increase by $625
FINRA has outlined a multi-year plan which would allow fee increases to be “phased in.”
Gensler Makes Final Pitch on SEC Crypto Rules (Author – Lydia Beyoud, ThinkAdvisor)
“Gary Gensler is making a final pitch for how the SEC should be allowed to regulate cryptocurrency markets ahead of the incoming Trump administration and its enthusiasm for digital assets.
In remarks prepared for a Thursday legal conference in New York, the Securities and Exchange Commission chair repeated that the agency should be focused on “rules of the road” that apply to crypto sales and intermediaries, such as brokers and exchanges, to promote proper disclosure.”
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