Each week, 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 Form CRS and the term “fiduciary”, the Securities and Exchange Commission (SEC’s) 30-day comment period for rule proposals, and the search for candidates for the SEC Investor Advisory Committee.
Here are our top investment adviser compliance articles for the week of January 14th, 2022:
1. Advisor Trade Group Wants SEC To Tell RIAs They Can Call Themselves Fiduciaries (Author – Tracey Longo, Financial Advisor)
The Institute for the Fiduciary Standard sent a letter to SEC Chairman Gary Gensler asking them to fix confusion surrounding RIAs’ use of the word “fiduciary” in their customer relationship summaries (“Form CRS”). Required by fiduciary law, RIAs have to put their clients’ interests first—a fact they believe is an important differentiator for investors to understand. The institute says that SEC guidance and staff advice have confused most RIAs and their compliance consultants into excluding or removing the word “fiduciary” from their customer summaries. They urged the SEC to clear up the source of the misunderstanding and provide additional guidance, but the SEC did not respond immediately.
2. Gensler Defends 30-day Comment Periods for SEC Proposals (Author – Mark Schoeff Jr., Investment News)
The SEC is pursuing a lengthy agenda of regulatory items. Securities and Exchange Commission Chairman Gary Gensler said, acknowledging that the agency has mostly used 30- to 45-day comment periods, the agency had to maintain a good pace in the rulemaking process, which includes staff reviews of comments to determine whether to modify a proposal. He defended the agency’s use of tight deadlines for public input on rulemaking proposals in remarks before a group of financial industry representatives who want more time. Gensler said, “It’s really important to get the public feedback, but it’s also really important to move on. It’s a discipline to start the next stage of the work.” Gensler encouraged the audience to weigh in on proposals but did not give any clues about the timeline for some major rule proposals, including those having to do with climate risk and other environmental, social and governance disclosures for public companies.
3. SEC Investor Advisory Committee Searches for New Members (Author – Melanie Waddell, ThinkAdvisor)
The SEC is seeking candidates for appointment to the Investor Advisory Committee, which provides recommendations to the agency on ways to protect investors and improve securities regulations. The committee advises and consults with the commission on regulatory priorities, issues relating to the regulation of securities products, trading strategies, fee structures, and the effectiveness of disclosure, initiatives to protect investor interests, and initiatives to promote investor confidence and the integrity of the securities marketplace. Candidates will be identified by a nominating committee, composed of staff from across the SEC’s divisions and offices, identifying nominees based on functional membership categories. Members of the public are encouraged to express their interest in serving on the Investor Advisory Committee.
4. Facebook Retargeting 101 (Author – Stephen Boswell, WealthManagement.com)
Stephen Boswell dives into the world of paid advertising and the role it plays in getting information and marketing efforts in front of the right people. There are various options when advertising on social media that can seem overwhelming when first starting out. But once that first step is taken, there are endless opportunities and benefits for you and your firm. Boswell suggests focusing on these three audiences when retargeting: 1) those who have already visited your website and engaged with your content, 2) existing prospects, and 3) those who have watched your videos on Facebook.
5. FINRA to Issue Crypto Notice, Consider Options and Expungement Reform (Author – Tobias Salinger, Financial Planning)
As the interest in cryptocurrency continues to rise, the Financial Industry Regulatory Authority (“FINRA”) is preparing a regulatory notice to offer more guidance and information. Earlier this week Robert Cook, CEO of FINRA, stated that the notice will further “explain the current guidelines and look into the question of how should those rules evolve and to make sure that we’re protecting investors appropriately”.
Don’t forget to check out last week’s top RIA compliance news articles that focus on RIA industry tech and automating compliance tasks, crypto scam threats, and DOL rollover scrutiny for RIAs opting out.