Displaying items by tag: SEC

(Washington)

The SEC says that a lack of fee disclosures related to conflicts of interest may be rife across the wealth management industry. Now the SEC is giving a free pass to those that have failed to disclose. So long as investors come clean and give money back to investors, they won’t be punished. The biggest abuses seem to be in the lack of disclosure of mutual fund fees, which goes against the rules laid out in the Investment Advisers Act of 1940. Those who come forward will not face civil monetary penalties, but that special treatment will only be for those who come forward voluntarily.

FINSUM: Hard to say how big of a problem this is. But it does sound like this might be a good way to clean up the issue quickly.

(Washington)

Yes, yes, we know—yesterday we said the new SEC fiduciary rule would be launched in the fall, now we are saying the spring. Yes, it is confusing, but so is the whole DOL-SEC joint fiduciary rule process. A new article in WealthManagement cites two well-respected experts on the issue as saying that they expect the rule to debut within 3-5 months, which could mean either in May or July, much earlier than the autumn date we reported yesterday. However, aside from timing, there are two huge questions lingering over any new rule. Firstly, how comprehensive will the rule be; and two, will states—which are fed up with the federal government wasting time—accept the new rule, or press ahead with their own.

FINSUM: There is still a very good chance that the new rule will get smashed by political fighting and states will forge ahead in creating a national patchwork of rules.

(Washington)

Advisors have been waiting with their fingers crossed in the hopes that the DOL rule might be done away with, and in its place, a new SEC rule installed. Well, it looks like a positive outcome might be on the cards. The SEC and DOL have been working on a joint rule for a few months and now it appears the new more harmonious fiduciary rule will debut this fall. Now the caveat to this news is that these are estimated dates based on various procedural deadlines, such as the DOL’s delay expiring in summer 2019, but experts in the space agree.

FINSUM: We think the SEC and DOL will debut a rule this fall for comment, probably in late fall, and then try to implement everything by July 2019. Stay tuned.

(New York)

While all the focus is understandably on stocks, Bitcoin is continuing to see a huge exodus of buyers. The market is now down to around $6,000, or about 70% from its peak of near $20,000. Bitcoin, and crypt currencies generally, have been brutalized by a number of regulatory announcements which seek to reign in the currencies. These include in South Korea—one of cryptocurrencies’ biggest markets, as well as by the SEC in the US, where chairman Jay Clayton has become a staunch enforcer.

FINSUM: We have been saying for months that there was simply too much regulatory risk to sustain the high valuations. That prediction has certainly proved right and we think it has further to run.

(Washington)
Advisors need to be aware and involved, say some of the top names in the industry, because the fiduciary rule is headed in directions that nobody wanted. While the DOL rule was far from perfect, what is in the works is worse—a patchwork of dozens of individual state rules set to fragment the US wealth management market. The SEC is working on a harmonized rule, but according to the CEO of Cetera, “If you are not actively engaged in that discussion with the regulators, then you are not fulfilling your obligations to this profession. You should be getting everyone you know, every advisor you know, to be a good citizen”.

FINSUM: We don’t now how much any individual advisor can do to affect the outcome of the fiduciary rule saga, but suffice it to say that things are quite dicey right now and every little bit helps.