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 SEC predictions for 2025, a limit on mandatory arbitration, FCA crypto regime, FINRA RSLs, and the most influential people in wealth management.
Here are our top compliance articles as of December 20, 2024:
SEC Rule Predictions: What’s In, What’s Out in 2025 (Author – Melanie Waddell, Think Advisor)
With SEC Chair Nominee Paul Atkins set to take over after the current Chair, Gary Gensler, departs in January, the industry has begun to focus on what they anticipate will change and how the compliance landscape will shift in 2025 and beyond. Key takeaways include:
- Changes to the Custody Rule
- Guidance on Reg BI
- A decrease in off-channel communication enforcement
- Enforcement actions targeting fraud
- A slowdown in rulemaking
The SEC can limit mandatory arbitration by RIAs. But will it ever? (Author – Emile Hallez, Investment News)
“The Securities and Exchange Commission’s Investor Advisory Committee met on Tuesday to discuss mandatory arbitration clauses used by RIAs in client contracts, comparing practices in the broker-dealer and state-registered RIA worlds. The hearing detailed findings of a year-and-a-half-old report from the SEC to Congress on that topic – among those were that six in 10 RIAs use mandatory arbitration. Further, most firms using it place limits on the forums and locations for arbitration, which investor advocates have said makes it expensive and burdensome for people to bring claims…
However, the imbalance in power between investors and RIAs in arbitration isn’t going anywhere without action, Puente said. Under the 2010 Dodd-Frank Act, passed in the wake of the financial crisis, the SEC can limit mandatory arbitration by RIAs, though the agency has not taken action on that.”
Merry Christmas, from FINRA: Home office updates due Dec. 26 (Author – Dan Shaw, Financial Planning)
Are you a broker-dealer with a home office? Then FINRA’s latest reminder is for you. Brokers have until December 26 to register their residential supervisory locations (RSL).
“The new designation, approved in November 2023, generally makes supervisors’ home offices subject to less frequent review by their firms’ headquarters: RSLs only have to be inspected by in-house investigators once every three years, down from a previous requirement of once a year.”
Additionally, December 27 is the deadline for broker-dealers to sign up for the second phase of FINRA’s remote inspections pilot program.
FCA launches crypto regime consultation (Author – James Langton, Investment Executive)
“The FCA issued a discussion paper today [December 16] seeking feedback on rules for guarding against market abuse in the sector, including proposals for strong internal controls, and information sharing among registered crypto trading platforms to detect and address suspected abuse.
In particular, the regulator said that it’s aiming to improve regulatory clarity, introduce stronger safeguards via registration requirements, reduce the risks of fraud and money laundering and improve the allocation of capital in the crypto sector by enhancing investor decision-making.”
20 people who will shape wealth management in 2025 (Author – Editorial Staff, Financial Planning)
In their annual list, Financial Planning highlights some of the key players shaping wealth management for the next year. This year’s list includes everyone from president-elect to SEC chairs and more:
- Donald Trump, President-Elect
- Paul Atkins, SEC Chair Nominee
- Hester Pierce, SEC Commissioner
- Michelle Bowman, Federal Reserve Board
- Robert Cook, FINRA
- Terri Kallsen, CFP Board
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