News

Plan to place B/D Advisers under FINRA scrapped

House kills amendment before passing huge financial regulatory reform legislation. Hours before passing the most significant financial-reform package in nearly 80 years, the House Friday killed an amendment that would have given the Financial Industry Regulatory Authority Inc. the authority to regulate investment advisers at broker-dealers.

FINRA to get tough on Reg D Offerings

Finra expects to bring cases against brokerage firms involved in selling private-placement offerings next year. Reg D refers to the securities regulations that govern the sale of private-placement investments, which are generally exempt from having to be registered with regulators. The self-regulatory organization has been receiving an increasing number of complaints from investors in recent months concerning sales of private placements. Finra is looking at misrepresentations made by brokers in connection with the sale of the products, as well as whether sales made to customers were suitable.

Dodd bill would make reps fiduciaries

Consumer groups on board, but SIFMA prefers House approach that could redefine ‘fiduciary’. The senate draft unveiled last week eliminates the “broker-dealer exemption” from the adviser registration provisions under the Investment Advisers Act of 1940, effectively requiring brokers providing advice to register as advisers and be subject to a fiduciary standard. That standard would be the same applied to advisers and would require them to put the client’s interests first. The House bill would require all brokers providing advice to abide by fiduciary standards, but would give the Securities and Exchange Commission the discretion to write regulations defining those standards. The SEC revision of fiduciary standards could result in rules closer to those which brokers work, which require only that products be suitable to the investor. The Obama administration’s plan would require brokers to come under a fiduciary standard.