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  • by Skip Schweiss
  • President, TD Ameritrade Trust Company
    Managing Director of Advisor Advocacy & Industry Affairs

Summertime Remains Busy Times for Regulatory Developments

August 9, 2017 – Like most folks, I usually look forward to some downtime in July and August.  Evidently, that is just not to be this summer.


In my last blog, I pointed out all the advisor regulatory developments  that made June 2017 the busiest, arguably the most newsworthy month in a long time in this arena. As I write this in early August, the pace of noteworthy regulatory development remains strong, with a number of new developments to report.

Investment advisor examinations

The SEC has been  under pressure from Congress and from marketplace rivals for years to increase the number of registered investment advisors it examines each year. Currently, about  11% of firms are examined .

Last year, the SEC reassigned almost 100 broker-dealer examiners to the RIA segment. And it continues to get smarter about reviewing Form ADV filings to determine where to best allocate scarce examination resources, such as devoting more time to  larger, more complex or higher-risk firms.

With these steps, it expects to raise that examination rate to maybe 15% by next year.

And while the SEC had for years been considering a program that would supplement its investment advisor exams with third party exams performed by private–sector firms, it recently announced it had deleted that action item from its to-do list.


The Department of Labor (“DOL”) recently issued its latest Frequently Asked Questions (FAQ) document, addressing two primary questions:

1. Many financial service providers were previously selling investments to a retirement plan as a non-fiduciary, and are now considered to be a fiduciary under the Conflict of Interest Rule (“the Rule”) Those entities must now disclose that status in writing, along with their compensation, to those plans under Rule 408(b)2. The DOL’s FAQ notes this, and allows some flexibility in timing given the evolving rule changes.

2. The FAQ notes, importantly, that advice to an employee to contribute to their 401k plan, or to increase their contribution levels, will not be considered fiduciary advice under the Rule.

New timetable for DOL Rule?

The DOL is also proposing to delay the remaining portions of the Rule – relating to disclosures, warranties, contracts, among others. – from Jan. 1, 2018, to July 1, 2019, a delay of 18 months.

This additional time is intended to allow the financial services industry more time to adapt to the Rule’s requirements, which are subject to change as a result of the DOL’s current examination of the Rule.  In addition, the delay would allow the mutual fund industry to  further develop ‘clean’ shares for funds, designed to comply with the  Rule by removing sales loads and trailing fees.

Stay in touch

We continue to stay in close touch with legislators, regulators, and your trade associations to monitor and provide input to these constantly-evolving issues that impact your business and your clients.  As always, we invite you to share your thoughts with us at TD Ameritrade Institutional, so that we can continue to  represent your views in Washington.


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