Compliance Newsflash –September 11, 2019

September 11, 2019

SEC Warns Advisors to Watch Principal Trading Activity

On September 4, 2019, ThinkAdvisor reported that the Securities and Exchange Commission’s exam division is warning advisors in a just-released Risk Alert to watch their principal trading activities, as the agency has noted numerous compliance infractions. The SEC’s Office of Compliance Inspections and Examinations highlights in the Risk Alert the most common compliance issues identified in advisor exams related to principal trading and agency cross transactions under Section 206(3) of the Advisers Act.

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Finra will defer to SEC on interpreting best interest rule

On September 9, 2019, InvestmentNews announced that when a new investment advice standard for brokers is implemented next June, Finra will be responsible for examining brokers for compliance. But the Securities and Exchange Commission will make the final call on determining how the regulation will work. “It’s not our rule. It’s an SEC rule,” Finra chief executive Robert W. Cook told state regulators on Monday at the North American Securities Administrators Association annual conference in Austin, Tex.

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