Contact Us

Archive for Independent Broker Dealer News

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>>

Posted in: Independent Broker Dealer News

Leave a Comment (0) →

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>>

Posted in: Independent Broker Dealer News

Leave a Comment (0) →

Department of Labor’s Fiduciary Rule Divides Financial Advisors & Brokers

DOL Fiduciary Rule may be history, but a Fiduciary standard still in the works ~

Financial Advisers and Brokers – believe that the SEC will deliver a fiduciary standard because consumers want it

Investment News, Jeff Benjamin reported on 3.16.2018 – reported that the latest blow to the Department of Labor’s Fiduciary Rule continues to divide the financial advice industry including Financial Advisors and Brokers.

“It’s a shame we keep having these conversations when we should just put our foot down, because there shouldn’t be an argument about whether it’s good to put the clients’ interests first,” said Elliot Weissbluth, chief executive of HighTower Advisors.

Reacting to Thursday’s ruling by the Fifth Circuit Court of Appeals, which vacated the DOL fiduciary rule, Mr. Weissbluth called out those that have opposed the fiduciary rule.

“This is not a complicated argument,” he said. “Those people who are complicating it are doing so because they have an economic interest in not putting the client’s interest first.”

The flip side of that argument is that “freedom” might be coming back to the financial advice space, according to Frank Congemi, president and chief executive of Benefactor Financial, an affiliate of broker-dealer Securities America.

“I’m glad the court shut down the DOL rule and now there’s no damn fiduciary rule,” he said. “Look at all the time and money we wasted on this, and look at the confusion it has caused the consumer.” Mr. Congemi compared the DOL rule to “communism, where you get one model and one system.”
“The whole system is just wrong,” he added. “There’s not much independence left for independent advisers if we’re all pushed into the same model.”
While some ardent opponents of the rule might be celebrating the latest twist in the DOL rule saga, most of the fans and critics of the rule are convinced the fiduciary debate is just getting started.

“I think it’s a good thing that this version of the rule has been put to bed, but I don’t think this is the end of fiduciary standards,” said Pat Sweeny, principal and co-founder of Symmetry Partners. “While well-intended, the DOL rule was poorly written and executed,” he added. “It will take some time, but I do think a fiduciary rule will be created. It won’t be stopped.”

Rita Robbins, founder of Affiliated Advisors, an affiliate of the Royal Alliance brokerage firm, also was not a fan of “best practices being legally mandated,” but believes it will take some kind of rule to clean up the industry. “I personally believe, unfortunately, we’re in an industry where unless somebody is legally forced to do something there will be advisers who won’t do it,” she said. Meanwhile, Ms. Robbins added that “placing additional burdens on advisers and firms to comply with DOL rules has already created mountains of additional paperwork, which clearly is burdensome overkill.” Read More>>

Posted in: Independent Broker Dealer News

Leave a Comment (0) →
Page 3 of 13 12345...»