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Mergers & Acquisitions Drop Significantly 2018

Mergers & Acquisitions Drop Significantly 2018

Mergers & Acquisitions Drop Significantly in 2nd Quarter of 2018

Though the number of deals is declining, the size of the average deal is growing…

Reported by Sarah Min, Investment News, on July 31, 2018 states:

Merger and acquisition activity in registered investment adviser firms dropped dramatically during the second quarter, according to a report from DeVoe & Co.

RIA transactions dropped to 32 in the second quarter from a record 49 in the first quarter. That continues the volatility seen recently, with the strong first quarter preceded by two weak quarters at the end of 2017.

“It’s been a whipsaw market,” said David DeVoe, managing partner at DeVoe & Co. “We’ve gone from record lows to record highs, so it’s a roller coaster.” Read More >>>

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SEC Moving Forward on Fiduciary Rule Despite DOL

Chairman Jay Clayton says ‘the sooner the better’ when asked when an SEC fiduciary rule will be ready

Investment News, Mark Schoeff, reported on 3.19.2018 that the Securities and Exchange Commission Chairman Jay Clayton, said Monday, that the agency is moving forward on a fiduciary rule and its work would not be affected by a court decision last week that struck down a similar Labor Department regulation.

On Thursday, the 5th Circuit Court of Appeals vacated the DOL fiduciary rule, which requires brokers to act in the best interests of their clients in retirement accounts. The regulation was partially implemented last year but the remaining provisions are being reviewed under a directive from President Donald J. Trump that could lead to major changes.

At the Securities Industry and Financial Markets compliance and legal seminar in Orlando, Fla. on Monday, Mr. Clayton said that the SEC is forging ahead despite the doubt now surrounding the DOL rule’s fate. The SEC rule is expected as early as this summer.

At the Securities Industry and Financial Markets compliance and legal seminar in Orlando, Fla. on Monday, Mr. Clayton said that the SEC is forging ahead despite the doubt now surrounding the DOL rule’s fate. The SEC rule is expected as early as this summer.

“Seventy-two hours later [after the court ruling was handed down], it hasn’t affected the way I’m approaching this,” Mr. Clayton said. “I haven’t had any discussions with DOL about what it means from a broader perspective of administrative law. But, as far as I’m concerned, we’re moving forward.” In terms of a timetable for a proposal, Mr. Clayton added, “From my perspective, the sooner the better.”
DOL appeal uncertain

A Trump administration official said it’s unclear whether the DOL will appeal the 5th Circuit ruling to the Supreme Court.

“I don’t have any insight into that at this time,” Craig Phillips, Treasury Department counselor, said on a SIFMA conference panel later in the morning. The court ruling “gives us an opportunity to look at this space freshly,” Mr. Phillips added. He noted that the fact that the DOL rule is partially in effect “creates a dilemma for the industry. Thoughtfully moving forward is key, and we have great confidence in Chairman Clayton to do so.” Read More>>

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Finra Streamlining Broker Dealer eExams

CEO Robert Cook says three examination teams may be consolidated

Investment News, Mark Schoeff Jr., reported on 3.20.2018 – that Finra could streamline its examination program this year for Broker Dealers.

Robert W. Cook, president and chief executive of the Financial Industry Regulatory Authority Inc., said the agency is reviewing the structure of its exam function, which involves three teams: sales practice, risk oversight, and operational regulation and market regulation.

“We’re going to be looking at whether it makes sense ultimately to consolidate — if so, how — or to coordinate. That’s a decision I expect we’ll be making this year,” Mr. Cook said Tuesday at the Securities Industry and Financial Markets Association Compliance & Legal Society conference in Orlando, Fla.

The move would be a further step in the “enhanced examination framework” that the broker-dealer self-regulator adopted this year, according to Mr. Cook. Under that initiative, Finra is trying to make its exams more risk-focused, choosing firms based on their business models and investor-protection dangers they present.

The changes won’t affect the frequency of Finra’s examinations of its approximately 3,700 members.
Finra is “still examining every firm on an every-four-year backstop basis, but moving away from designating firms as 1-, 2-, 3- or 4-year cycle firms [to] instead focusing on [whether] they’re a this-year firm or not based on their risk profile,” Mr. Cook said.

Finra has taken on more responsibility for broker-dealer examinations over the last two years, as the Securities and Exchange Commission has shifted about 100 of its examiners from broker examinations to investment-adviser examinations in order to increase coverage of advisers.
“In the Finra space, oversight is enhanced, but I think it’s been very constructive,” Mr. Cook said. Read More>>

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