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 the SEC removing Regional Directors, an AI Ethics guide published by the CFP, an FCA Portfolio Letter on Asset Management & Alternatives supervisory strategy, the recent EO regarding Independent Agencies, and the SEC’s CETU.
Here are our top compliance articles as of February 28, 2025:
SEC to Remove Regional Directors: Report (Author – Melanie Waddell, Think Advisor)
The Securities and Exchange Commission (SEC) plans to eliminate regional office directors across its 10 regional offices as part of a cost-cutting initiative, according to Reuters. This comes after the SEC announced the closure of its Salt Lake Regional Office, citing budget and organizational efficiency.
CFP Board Publishes AI Ethics Guide for Advisors (Author – John Manganaro, Think Advisor)
The CFP Board has released an AI ethics guide for advisors, aiming to provide a framework for the ethical use of artificial intelligence in financial planning. This guide addresses key concerns such as transparency, accountability, and fairness, ensuring that AI tools are used responsibly to enhance client services without compromising ethical standards. The guide emphasizes the importance of maintaining human oversight and judgment in AI-driven processes, highlighting the need for advisors to stay informed about AI developments and their implications for the industry.
FCA Portfolio Letter: Asset Management & Alternatives – Supervisory Strategy (Author – FCA)
The FCA’s 2025 Asset Management & Alternatives Portfolio Letter outlines the regulator’s current supervision priorities for firms in this sector. Overarchingly, the FCA aims to focus their supervisory work on supporting confident investing in private markets, building firm and financial system resilience against market disruption, and securing positive outcomes for consumers.
More specifically, the letter highlights current supervisory priorities and focus areas, which include:
- Valuation practices
- Conflicts of interest
- Retail offers of private market products
- Liquidity risk
- Operational frictions
- Consumer outcomes
- Implementation of the labelling, naming, and marketing rules
- Controls to mitigate financial crime and market abuse
- Proportionate and risk-based due diligence on investors
- Know Your Client (KYC) checks
“We will also undertake targeted work to support trust in the market for sustainable investment and to reduce financial crime and market abuse. Our supervisory work complements our wider policy work, and particularly our work to support growth.”
Trump tightens grip on regulators (Authors – Nicola M White, Lydia Beyoud, and Leah Nylen, Financial Planning)
“President Donald Trump sought to rein in independent federal agencies in an executive order Tuesday that aims to curb the ability of some of Washington’s most powerful regulators to oversee banks and other companies.
The order, which applies to agencies including the Securities and Exchange Commission, the Federal Trade Commission and the Federal Communications Commission, calls for the entities to submit draft regulations for White House review before publication and consult with the Trump administration on their priorities and strategic plans.”
SEC Announces Cyber and Emerging Technologies Unit to Protect Retail Investors (Author – SEC)
The Securities and Exchange Commission (SEC) has announced the creation of the Cyber and Emerging Technologies Unit (CETU) to combat cyber-related misconduct and protect retail investors from bad actors in the emerging technologies space. Led by Laura D’Allaird, CETU replaces the Crypto Assets and Cyber Unit and consists of approximately 30 fraud specialists and attorneys.
CETU will focus on:
- Fraud committed using emerging technologies, such as artificial intelligence and machine learning
- Use of social media, the dark web, or false websites to perpetrate fraud
- Hacking to obtain material nonpublic information
- Takeovers of retail brokerage accounts
- Fraud involving blockchain technology and crypto assets
- Regulated entities’ compliance with cybersecurity rules and regulations
- Public issuer fraudulent disclosure relating to cybersecurity
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