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You’ve seen warning labels before – on cigarette
packs, flammable liquids, poisonous substances, your medications, and hot
coffee cups. I found one
label affixed to my hotel window that read, “The screen does not prevent
children from falling out.”
I figured out something – warning labels will not
stop people from doing dumb things. But
I guess that’s why we have our rulebooks and compliance manuals.
Perhaps somewhere within all that verbiage, we will figure out what
the regulators want us to do.
Last year I observed that the pace of regulatory
changes had actually slowed and I reported a kinder gentler tone at the
SEC and NASD. I cited
speeches from Christopher Cox, SEC Chairman; Mary Schapiro, NASD CEO; and
even from a Congressman, Vito Fossella.
More regulators and government officials have joined
the chorus expressing concerns about overregulation. They include: Congressman Richard Baker (R-LA); Henry M.
Paulson, Treasury Secretary; Ben Bernanke, Federal Reserve Chairman;
Annette Nazareth, SEC Commissioner; Andrew Donohue, SEC Director of
Investment Management; and Elisse Walter, NASD EVP Regulatory Policy and
Oversight. Overregulation is
now a regular topic in the press.
Unfortunately, at this time it is more
regulatory-speak than actions. We
have not yet seen a mass undertaking to make the rules friendlier or to
stop rulemaking by enforcement. But
I am optimistic that results will be forthcoming.
The NASD and NYSE merged, creating a new Self-Regulatory
Organization. This is an
opportunity to rewrite the rules, and focus on principles-based
regulation.
The “Broker/Dealer (‘Merrill Lynch’) Rule”
got overturned. The SEC has
commissioned the Investment Advisor/BD Study to get a read on the current
state of the industry. Upon
completion, we may see some congressional activity and legislative changes
to take the BD and RIA industries to a more level playing field.
RIAs are fiduciaries by law and BDs “only” have the suitability
standard under NASD rules. BDs
have a higher level of entry into the field through the NASD application
process and have many many more pages of rules to abide by.
Does that make one regulated entity better than the other?
Both try to serve their customers well.
The investors can’t tell who is a BD, RIA, or dual registrant.
Do we need to keep the great divide – or bridge the gap?
Rules and regulations
are good. They should help,
and not hinder doing business. Here’s
wishing that the burden of compliance eases up and that you can get back
to focusing on serving your clients.
My gift to you is a set of labels to remind you to heed warnings,
pay attention to details, avoid danger, listen to advisories, take notice,
and be cautious.
Warning:
If you are not already a subscriber to the CompliancE-News, submit
your $75 for 12 monthly issues. The
CompliancE-News is designed to give you quick bites of information
affecting our industry in compliance, practice management, and marketing.
The articles provide a synopsis of the issues; links are provided to take
you right to the source if you wish to do additional research on the
topic.
There are Free Resources for you at: www.liftburden.com/free_resources.htm.
If you want to be notified of new postings, please sign up at: www.liftburden.com/news/index.php
For
those who need assistance, I have 3 options to lift your burden.
·
CONSULTING SERVICES: I work with a limited
number of clients under annual retainer.
I generally keep a full client load.
However, I do take on new clients from time to time, so keep those
inquiries and referrals coming. If
I can’t be of direct or immediate assistance, I will offer the other two
options.
·
COMPLIANCE RESOURCES: If you
are a do-it-yourself type person, I offer an array of products that are
both educational and easily customizable to your practice. See www.liftburden.com/product.htm
for a complete list.
·
REFERRALS: If you need the personal
attention of a consultant (and my schedule is full), I’ll refer you to a
trusted colleague.
Have a safe and sane July 4th and a compliant year.
Nancy Lininger
WARNING: Don't attempt this on your own.
I have been lifting the burden of compliance for 18 years.
P.S. For those of you reading this letter on the
website, submit your e-mail request "I need warning labels." Please
include your name and shipping address so that I can mail your labels.
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