Compliance

The Pension Protection Act is succeeding at encouraging employers to automatically enroll and annually increase contributions for workers, Vanguard has found in an analysis of the defined contribution plans it administers.

The Securities and Exchange Commission has opened a 60-day public comment period to see whether the U.S. should adopt international reporting standards.

New York Attorney General Andrew Cuomo is reportedly looking into whether Fidelity Investments might have been motivated to sell Goldman Sachs' underwritten auction-rate securities due to a pre-existing business relationship.

The European Commission’s legal certainty group (LGC) has issued a set of recommendations designed to help improve and harmonize post-trade securities processing across the European Union.

The Securities and Exchange Commission suffered a setback last week in its efforts to prosecute individuals for insider trading after a judge dismissed the charges on a case from 2001.

A ruling last month by the Internal Revenue Service, limiting the ability of investors in funds of hedge funds to deduct management fees from their federal income taxes, could prompt some managers and their investors to either redo their tax forms or challenge the decision.

Don’t throw the baby out with the bath water.That, essentially, is the message from Vanguard Chairman John Brennan to the Securities and Exchange Commission, in response to the SEC’s plan to change a rule governing money market funds - making Vanguard the first major mutual fund company to protest the proposed change.In response to the subprime crisis, and the apparent failure of ratings agencies to properly grade the securities, the SEC is proposing shifting the responsibility for assessing short-term debt from Moody’s, Standard & Poor’s and Fitch, to squarely on the shoulders of asset management firms.That would be a mistake, Brennan argues, that could harm investors in the $3.5 trillion money market mutual fund industry.“It is our view that the proposed elimination of ratings would remove an important investor protection from Rule 2-a7, weaken investment standards and, potentially, pose a risk to the long history of stability of the $3.5 trillion money market fund industry,” Brennan wrote in a letter to the SEC.“Ratings, even if occasionally imperfect, protect investors by establishing a uniform, minimum credit quality for all money market funds. Removing that investor protection is akin to outlawing seat belts.”

To the North American Securities Administrators Association (NASAA), there are plenty of modern-day Willie Suttons eager to go "where the money is."Today, the money is largely held by seniors. Hence, regulators say, seniors are the targets of unscrupulous salespeople armed not with pistols, but with professional designations that exaggerate their competence or their concern for seniors' well-being.Now some of these individuals are being sought out not by potential clients, but by federal regulators, including the SEC and FINRA. These regulators are making it clear that advisors who use the word "senior" or various synonyms to transact business unethically are squarely in their sights. These individuals are "among [regulators'] top targets," says Tracy DeWald, general counsel at Securities America, a broker-dealer based in Omaha, Neb. "People age 60 and over are the biggest source of regulatory complaints."According to NASAA, some product salespeople using "senior" designations typically invite senior citizens to seminars where a free lunch is served along with a presentation on investments. Either at the seminar or through follow-up contacts, some advisors ultimately sell unsuitable investments to some of the attendees.In April, NASAA introduced a model rule on the use of senior- specific certifications and professional designations. This rule, which prohibits the misleading use of designations that include words like "senior" and "retiree," has already been adopted by the state of Washington. At press time, New Hampshire was set to adopt the rule and other states are likely to follow suit. A report issued last year by NASAA, FINRA and the SEC lists the popular Certified Senior Advisor (CSA) designation among those it considers misleading or confusing.Some broker-dealers have effectively banned reps from publishing senior-related credentials. Genworth Financial, for example, prohibits its employees and agents from using the CSA designation (the most common senior designation) on their business cards or in their marketing materials."We have a similar policy," says DeWald of Securities America. "In fact, we have lists of which designations are acceptable in published materials and which aren't. None of the 'senior' or 'elder' designations are on the accepted list. Some of our reps have these designations, which they can mention to clients in conversation. They can't put the letters behind their names to promote themselves."The CSA designation is conferred by the Society of Certified Senior Advisors (SCSA), which bills itself as the world's largest membership organization for professionals seeking to improve their skills in working with seniors. More than 9,500 advisors now hold a CSA designation.SCSA executives are quick to defend their organization."We're aware of regulators' concerns that certain professional designations may be misperceived by the public," compliance specialist Bill Kaluza says. "That's why SCSA requires each CSA to provide a written disclaimer to clients and potential clients."Are the CSAs telling the disclaimer to potential customers?"To date, we've had very little indication that CSAs are not using the statement," Kaluza said.

WASHINGTON - Fidelity Investments and Charles Schwab & Co. are suggesting state and federal securities regulators focus their auction-rate securities investigations on the major banks and broker-dealers that underwrote ARS rather than smaller brokerages that had no advance knowledge that the ARS market was going to collapse.

The Securities and Exchange Commission has unveiled its latest plan to make financial information far more accessible and easy to use.

William F. Galvin, Massachusetts secretary of the commonwealth, has written a letter to Fidelity Chairman Edward C. Johnson III asking the firm to repurchase auction-rate securities that it sold to investors through its brokerage unit, Dow Jones reports.

The Securities and Exchange Commission announced Tuesday that it made its first of four payments to the 1.5 million Putnam Investments who were harmed by market timing, paying $40 million to 600,000 investors. In all, the distributions will total $150 million.

A number of brokerage firms that sold auction-rate securities, including Fidelity Investments, do not think they should be forced to buy back the instruments, much as the investment banks that created them have been doing, to the tune of $40 billion, The Wall Street Journal reports. Their thinking is that they were merely sellers of the ARS and didn’t have knowledge of their imminent demise, as the banks that ran the auctions did.

New York Attorney General Andrew Cuomo is reportedly investigating Fidelity Investments and Charles Schwab over auction-rate securities, although it is unclear at this point over whether the probe is into sales or investment strategies.

Equity indexed annuities, which provide investors a portion of the market’s rise but do not decline in value when the market falls, have become increasingly popular among seniors.

The Securities and Exchange Commission has opened a website originally created for internal purposes at the Office of Compliance Inspections and Examinations to fight anti-money laundering, for compliance officers at mutual funds.

In addition to helping employees save for retirement, a solid 401(k) plan can help companies to attract, motivate and retain good workers, enhance a company's corporate reputation and contribute to the long-term financial success of the business, according to a new study by Charles Schwab.

Ever since those first gatherings under a buttonwood tree, the business of Wall Street has been highly social, with personal contacts, access to information and networking abilities playing a crucial role.

As more investors begin to believe that the global economy is in a recession, fears of inflation are dropping, and money managers are turning their concerns from credit risk to leverage.

The Security and Exchange Commission’s 30-day rule temporarily banning short selling of Freddie Mac and Fannie Mae stock is set to expire Tuesday night.