News in Personal Trading Software & Compliance Monitoring Tools

What’s in the news: the top five compliance articles for Sept. 3 – Sept. 16, 2022

Compliance innovation moves fast, but the news moves faster. To keep you and your team up to speed on the latest happenings and goings-on in the compliance world, we’ve aggregated the top five articles from the past few weeks to provide you with an in-depth look at the regulatory ecosystem.

Stay up-to-date and in the know on everything happening in the compliance world as of Sept. 16, 2022.

Top five compliance articles

SEC emphasizes ‘best interest’ aspect of Reg BI, fiduciary duty – Author Mark Schoeff Jr.

Brokers have been working under Regulation Best Interest, the broker standard of conduct that went into force in June 2020. As part of the Reg BI rulemaking package, the SEC also issued an interpretation of the Investment Advisers Act that requires investment advisers to be fiduciaries to their clients.

SEC Chair Gary Gensler has said the agency will try to ensure that Reg BI delivers “best interest” care for investors through examinations, guidance and enforcement. The agency also has released two staff bulletins that outline how brokers and investment advisers can comply with their respective standards when it comes to making account recommendations and addressing conflicts of interest.

SEC Chief Presses Senators to Fund More Reg BI Exams – Author Melanie Waddell

In his address to Senators, Securities and Exchange Commission (SEC) Chair Gary Gensler requested additional budget specifically in support of the Examinations Division’s work towards Reg BI enforcement.

Gensler said that the enforcement division “is doing more with less.” For example, “more cases are being litigated and going to trial. The SEC has tried the same number of cases to verdict in federal courts in FY22 (14) as we did in the prior three fiscal years combined.”

In fiscal 2021, Gensler said, the agency received 46,000 tips, complaints and referrals from the public, up from about 16,000 five years earlier.

As to the exam division, Gensler said that in the most recent completed fiscal year, this division exceeded the previous year’s numbers by completing more than 3,000 exams.

Can Compliance Be a Revenue Generator? – Author Diana Britton 

Do you think of your compliance department as simply a line item on your expenditures budget? Think again. In fact, according to a panel at Future Proof, your compliance department could be one of your best assets in generating new revenue.

“In general, strong compliance, strong culture does in many cases result in better performance,” Bowers said. “I don’t know if it’s a causation issue or correlation issue, but we do know that firms that have strong compliance infrastructures, firms that have strong firm cultures have been demonstrated to perform better in their investments.”

SEC Chief Renews Vow to Crack Down on Crypto Industry Rule-Breakers – Author Lydia Beyoud

The regulation of cryptocurrency remains a critical focal point for the SEC and industry leaders alike, with both sides of the proverbial digital coin sticking to their argument regarding how cryptocurrencies ought to be handled moving forward.

“Gensler on Thursday repeated his demands that crypto exchanges, brokers and attorneys in the digital-coin industry comply with securities rules. It’s the latest salvo by the SEC chief in his push to clamp down on an asset class that he says often operates in legal gray areas.”

Move Now on SEC Marketing Rule Compliance Pros Warn – Author Melanie Waddell

Have you started work towards complying with the SEC’s new marketing rule? If not, you should.

“Firms shouldn’t dawdle, as SEC examiners will include compliance with the Marketing Rule as a focus area for 2023, adds Ken Joseph, managing director and head of the Financial Services Compliance and Regulation practice for the Americas at Kroll.

Lynch of FrontLine adds that some firms are behind because there is more to compliance with the rule “than just updating the firm marketing policy. Several areas need to be addressed and changes may need to be made in actual marketing materials and solicitation practices. This can be a heavy lift and if firm’s have not yet started then they are already behind.”