Editor column
Article Type: Editor column From: Journal of Investment Compliance, Volume 12, Issue 2
We begin this issue with an article by Jessica Forbes and Gregory Gnall that explains a January 2011 US Securities and Exchange Commission (SEC) study pointing to confusion among many retail investors about the respective roles played by investment advisers and broker-dealers and recommending more uniform standards governing the two in areas such as conduct, fiduciary duties,investment advice and avoidance of conflicts of interest. Then Lawrence Polk and Avital Stadler explain two new FINRA rules that require member firms to know the essential facts concerning each customer and expand the list of factors an associated person is required to consider as part of a customer’s investment profile before making a recommendation.
Next Edward Pittman, Cheryl Krause, Thomas Bogle, and Justin Danilewitz remind investment advisers seeking business opportunities outside the United States, for example with sovereign wealth funds, of the importance of complying with the US Foreign Corrupt Practices Act and, in so doing, complying with foreign anti-bribery laws. Then Bryan Ward explains concern about industry arbitrators in three-person arbitration panels and SEC rule changes that now allow claimants to choose arbitration panels made up entirely of public administrators. Lennine Occhino, Linda Shore, and Erika Gosker describe interpretive and compliance issues arising under the a US Labor Department interim final regulation whose primary purpose is to assist sponsors of ERISA-governed retirement plans in evaluating service provider relationships,including total compensation that will be received by the service provider and conflicts of interests to which the service provider may be subject.
James Weidner, Christopher Lane, and Sean Peterson assess the possible impact of several developments since the June 2010 US Supreme Court Decision in Morrison v. National Australia Bank Ltd, concerning the extraterritorial application of Section 10(b) of the Securities and Exchange Act of 1934, including three lower court decisions, a provision in the Dodd-Frank Act, and other expert commentary. Thomas Schiera provides hedge fund and other private fund managers with a brief recap of regulatory changes in 2010 and a reminder of certain“best practices” they should consider as they prepare for 2011. Then Richard Hervey summarizes and provides a detailed explanation and analysis of each of the provisions in the Regulated Investment Company Modernization Act of 2010.
Simon Gleeson, Chris Bates, and Charles Morris discuss a new interventionist stance taken by the UK Financial Services Authority (FSA) and prospectively by its successor, the Financial Conduct Authority (FCA), in the area of retail investment product development, approval, disclosure, and pricing. Dan Ornstein explains the final version of the FSA’s Remuneration Code which, in line with similar legislation in other major financial-center jurisdictions, seeks to remove some of the financial incentives for risky behavior.
Finally, Rob Sokol describes for the compliance community’s benefit a new model of flexible, high-service, open architecture of what are called“plug and play” online brokerage firms.
Henry A. DavisEditor
