BROWSE BY TOPIC
- Bad Brokers
- Compliance Concepts
- Investor Protection
- Investments - Unsuitable
- Investments - Strategies
- Wall Street News
- Investments - Private
- Rules & Regulations
- Bad Advisors
- Boiler Rooms
- Terminations/Cost Cutting
- General News
- Donald Trump & Co.
- Big Banks
- Regulatory Sanctions
Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
Municipal Advisors Weak on Regulatory Obligations - SEC
OCIE, the SEC Office of Compliance Inspections and Examinations, launched in 2014 the Municipal Advisor (“MA”) Examination Initiative to conduct examinations of newly registered MAs. Since then, OCIE has conducted over 110 MA examinations - evaluating compliance with regulatory obligations including registration, statutory fiduciary standard of care, fair dealing, recordkeeping, and supervision, among other things.
BACKGROUND. Prior to the passage of the Dodd-Frank Act, the activities of MAs were largely unregulated, and MAs were generally not required to register with the SEC or any other federal, state, or self-regulatory entity with respect to their municipal advisory activities. Section 975 of Title IX of the Dodd-Frank Act required MAs to register with the Commission as of October 2010. In September 2013, the Commission adopted final MA registration rules, which became effective in July 2014. The Dodd-Frank Act also assigned the MSRB with regulatory authority over MAs and imposed a fiduciary duty on MAs when advising municipal entities.
KEY OBSERVATIONS. OCIE staff observed that MAs were generally unfamiliar with many of their regulatory obligation - in particular. related to registration, recordkeeping, and supervision. The OCIE staff recommends that MAs take steps to educate themselves regarding these compliance obligations.
- Failure to register with the Commission or the MSRB prior to engaging in MA Activities;
- Failure to file annual updates to Form MA;
- Failure to file amendments to Form MA, Form MA-I, and MSRB Form A-12 when required;
- Failure to complete Form MA with accurate and complete information, particularly with respect to compensation arrangements and outside business activities;
- Failure to pay MSRB registration fees and late fees; and
- Failure to file a Form MA-W and withdraw MSRB Form A-12 when withdrawing from MA registration.
BOOKS & RECORDS DEFICIENCIES.
- Failure to maintain copies of written communications sent or received by the firm related to MA Activities, including those sent electronically;
- Failure to make and keep documents material to a recommendation made to a client;
- Failure to prepare and maintain accurate general ledgers. For example, the staff often observed that MAs’ general ledgers did not accurately reflect assets, liabilities, reserves, capital, and income and expense accounts; and
- Failure to maintain accurate records of cash receipts and disbursements.
- Failure to have a system to supervise the MA Activities of employees that was reasonably designed to achieve compliance with all applicable rules;
► Failure to monitor gifts, travel, and entertainment expenses, including the failure to maintain accurate records of travel and entertainment expenses either indexed or capable of being searched by recipient;
► Failure to oversee the firm’s responses to requests for proposals;
- Failure to have WSPs reasonably designed to ensure compliance with applicable rules;
► Failure to tailor WSPs to the firm’s business activities and conflicts of interest; and
- Failure to designate one or more principals to be responsible for supervisory activities.