Regulations on per-share estimated values and general solicitation from qualified investors are bringing about a variety of changes for private placements, a panel of legal experts said at the Investment Program Association’s 2016 Executive Leadership Summit, held in Washington, D.C., on April 19.
More custodians and broker-dealers will be expecting to see per-share values that are compliant with Regulatory Notice 15-02 from the Financial Industry Regulatory Authority, said Martin Dozier, counsel at Alston & Bird. The amendments concern how per-share estimated values are disclosed in account statements for direct participation program and nonlisted real estate investment trust securities, with the goal of giving investors more accurate and timely estimations of value.
Values under 15-02, however, might not be uniform, as “one issue with wording is that an issuer can come up with different values if it chooses to,” Dozier said. (read more…)
This post is sponsored by FolioDynamix.
The Labor Department’s fiduciary rule changes are reshaping the way the financial advisory industry operates, creating a need for technology that will help with compliance and portfolio management.
Here we talk with FolioDynamix President and Chief Operating Officer Steve Dunlap about how the new rules are changing the business and how advisors can create better customer experiences while balancing these new demands.
Question: How does the Labor Department’s new fiduciary rule change the landscape for financial advisors?
Steve Dunlap: There’s been a lot of discussion about how the rule was “softened” from the original proposal, but I believe the changes are still fairly dramatic for Registered Representatives who do significant commission business. Because all IRA accounts will now be subject to a fiduciary obligation, or require a BICE (best interest contract exemption), there is a major adjustment to be made in terms of paperwork and suitability standards, and frankly, the broker-dealer model does not necessarily lend itself to making these changes. (read more…)
A collection of stories from SmartBrief publications and around the web…
It has been a week of regulatory relief in the world of finance. The Basel Committee on Banking Supervision kicked things off by proposing a new method for banks to assess their exposure to derivatives. The new method may reduce the amount of capital banks need to meet restrictions on leverage.
The Labor Department followed suit with a less-aggressive-than-previously-mooted fiduciary rule. It might seem strange that the DoL back-pedaled a bit during a year that has seen so much rancor on the campaign trail directed at the financial services industry, but lobbying money talks on Capitol Hill and it appears the DoL went with a rule it thought might actually achieve some additional protection for consumers and not get thrashed by lawmakers.
A couple random thoughts on the DoL’s final fiduciary rule:
- The rule still allows for firms to sell relatively expensive in-house “proprietary” products to clients.
The Labor Department’s proposed fiduciary rule has reached the White House’s Office of Management and Budget, and professionals who provide retirement advice are now awaiting the final version. Meanwhile, states are considering legislation to allow reserve calculations that could benefit life insurers’ solvency. Deloitte experts explores these issues’ effects on the life insurance and annuity industries in a report and in a recent interview with SmartBrief.
Uncertainty exists around the effective date and implementation schedule of the Labor Department’s proposed rule, although major provisions are expected to take effect this year, says George Hanley, leader of Deloitte Advisory’s U.S. regulatory and compliance group.
“Companies will need to develop a ‘playbook’ for all affected areas and be prepared to implement [that] playbook when the rule becomes effective,” he says.
Insurers need to thoroughly understand the proposal and its likely effects on annuities, retirement plans, mutual funds and other products, as well as distribution, operations and IT, Hanley says. (read more…)
The Futures Industry Association recently released its 2015 Annual Survey on Global Derivatives Volume. SmartBrief chatted with Will Acworth, Senior Vice President of Publications, Data and Research at FIA, to learn more about the survey and the trends it uncovered.
What are the key findings of FIA’s 2015 Annual Survey on Global Derivatives Volume?
The big trend that we saw last year was a jump in the trading volume on Asian exchanges. We collect statistics from about 75 exchanges worldwide and 28 of those are in the Asia-Pacific region. Last year, Asia-Pacific exchanges handled 9.7 billion futures and options contracts, which represents a 33.7% increase from the previous year. That compares with basically zero growth in North America and about 8% growth in Europe. Clearly, volumes in Asia were growing much faster than the rest of the world.
Another development worth noting is that if you look at the share that Asia has of the global market, it is definitely on the rise. (read more…)