My job frequently requires that I explain to someone – whether my client, an ALJ, an arbitration panel, even a regulator – the fundamental difference between a broker-dealer and an investment advisor. An IA operates pursuant to a fiduciary duty; a BD, on the other hand, even with the advent of Regulation BI, largely has
Fiduciary Standard
Securities America SEC Settlement Raises Prospect Of New Supervisory Standard
By Alan Wolper on
There have been tons of cases where firms got in trouble – in AML trouble, which is one the worst kinds of trouble – for failing to be sufficiently on top of third-party wires, i.e., where a customer wires money not to himself but to someone else. In a change of pace, last week, the…
Reverse-Churning: BDs Are Damned If They Do, And Damned If They Don’t
By Alan Wolper on
A couple of years ago, I blogged about the concept of “reverse churning,” i.e., putting a customer who trades only infrequently into a fee-based account, thus costing the customer a lot more than it would have cost that customer to be in a commission-based account. The reason this became a topic was, at the time,…
OMB Approves Additional Delay For Further Study Of The DOL Fiduciary Rule
By Fran Goins on
Posted in Fiduciary Rule
The Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) announced this week that it was effectively approving a delay in full implementation of the Department of Labor (DOL) Fiduciary Rule. After several years of study and comment, the final version of the Rule was originally slated to take effect earlier this…
How The Fiduciary Rule May Impact Outside Business Activities
By Alan Wolper on
Because fixed annuities and fixed life insurance are not securities, many broker-dealers treat the sales of these products by their registered reps as outside business activities. In that event, there is no obligation by the BD to supervise those sales, and they can be run directly with the issuing company and not through the broker-dealer. …
DOL Seeks To Clarify Fiduciary Rule Timing With Temporary Enforcement Policy
By Fran Goins on
On Friday evening, March 10, 2017, the Department of Labor (DOL) issued a field assistance bulletin establishing a new temporary enforcement policy for the DOL Fiduciary Rule set to become effective on April 10, 2017. (See here) The temporary policy was designed to deal with industry uncertainty created by a new rule proposed for …
Trump Actions on the DOL Fiduciary Rule and Dodd-Frank
By Fran Goins on
Here are some important observations from my partner, Fran Goins, on two missives President Trump issued on Friday that you should know about. My own politics have made themselves pretty clear in recent posts, so it’s good to have someone comment on these presidential pronouncements without the snarkiness I would have undoubtedly injected, wittingly or …
The Wendell Belden Case And Its Progeny: Fiduciary Before Fiduciary Was Cool
By Alan Wolper on
The entire securities world is anxiously awaiting the implementation of the fiduciary standard over retirement accounts, and, by most accounts, the eventual spread of that standard to ordinary investment accounts. I am not prepared to argue that this is not a big deal, and will cost the industry a ton of time and money to…
Highlights from Day Two of SIFMA-CL Conference
By Alan Wolper on
The Rick Ketchum Show. Today’s sessions opened with what was likely the highlight of the entire conference, Rick Ketchum’s swan song “conversation” with Ira Hammerman, GC of SIFMA, before he toddles off into retirement. Granted, these interviews never remotely approach Sixty Minutes intensity, but this year’s featured even more coddling than ever:
- What would
…
Highlights from Day One of SIFMA-CL Conference
By Alan Wolper on
Posted in Best execution, CCO liability, Culture, Fiduciary duty, Fiduciary Standard, FINRA, municipal securities, SEC, SIFMA, Supervision
Opening Session/Firm Culture/CCO Liability. If you are reading this blog, then you, like me, have been probably eagerly waiting for the start of SIFMA’s annual Compliance and Legal conference not just for the jumbo shrimp at the reception, but also to learn some insights from the regulators about their concerns and intentions. If you…