Insights from the experts in investment fiduciary responsibility.

Fiduciary Links: FINRA, the SRO Bill and Other Updates

Posted by Kathy Stewar on February 11, 2013

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 >>>>During the last two years, FINRA has spent over $2 million lobbying Congress, largely in support of bill that would establish an independent SRO for investment advisors. For that reason, the reports last week that suggested FINRA and other advocates of the SRO bill may be moving on from the issue came as something of a surprise. However, indications now are that it probably isn’t so simple.

“It's good news that they're not working the bill on Capitol Hill at this time,” fi360’s Duane Thompson told InvestmentNews. “It doesn't mean they're going to forget about it or walk away completely.”

IN’s updated story indicates that FINRA won’t abandon the issue completely and another report suggests they may be looking to find a champion in the Senate

>>>>With more fees and services data available to plan sponsors due to the 408(b)(2) disclosure rules now in effect, many predicted a lot of movement as plans reacted. This has been true with large plans that have significant resources and motivation to seek out the best deals possible. For smaller plans, however, this has not been the case. New research indicates that most small employers are reluctant to change unless necessary, due to the effort and disruption involved. This, of course, raises the interesting question of what is an advisor’s liability if a plan sponsor elects not to make any changes, even if a better deal is theoretically possible?

>>>>As regulators prepare to testify regarding progress under Dodd Frank to the Senate banking committee this week, it appears that rulemaking trudges slowly forward.  According to statistics related to Dodd-Frank released by the Davis Polk law firm, there are 398 rules required to be enacted. Of those, over 37% have been finalized and over 30% yet to be proposed.  The firm also reported that about 60% of the rules are running behind their stated deadlines for enactment.

The Senate hearing is scheduled for Thursday.


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