Law and regulation

Negotiators made progress overnight as they tried to reach a last-minute U.S. budget deal that would let income taxes go up on some top earners.

Over the coming year, financial regulators are expected to press ahead with scores of rulemaking proceedings that will affect advisors and their clients. Lawmakers will continue to refine and implement numerous provisions of the Dodd-Frank financial reform bill, while mulling the possibility of expanding oversight of investment advisors.

With little more than a day remaining to avert tax increases for almost every U.S. worker and to halt federal spending cuts, Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell worked to bridge gaps over income tax rates, the estate tax and other issues.

President Barack Obama made a last- minute appeal for compromise as three senators said the chances were greater than 50-50 for a deal to avert more than $600 billion in tax increases and spending cuts scheduled to take effect Jan. 1. In an interview broadcast Sunday on NBC’s “Meet the Press,” Obama warned of “an adverse reaction in the markets” if Congress doesn’t act.

If there is one sentiment that fiscal policy debates in Washington have taught investors not to expect over the years, it’s optimism, according to the chief market strategist at LPL. Time and again, we have seen our politicians respond to serious questions on the future of our nation’s economy by kicking the can down the road, or worse. Could it be different this time around for 2013?

Federated Investors is looking to fold a 2-Star rated fund into a 4-Star rated fund.

This holiday season has been a mixed bag for TCW Group.

Congress is scheduled to return Thursday, with one of its top priorities a deal to avert the December 31 “fiscal cliff” deadline of looming tax increases and automatic spending cuts, but it will need to work quickly or reach some type of interim agreement.

The Securities and Exchange Commission has issued an Investor Bulletin to help purchasers of municipal bonds better assess the bonds’ credit risks.

The Financial Industry Regulatory Authority has ordered five firms to pay $4.48 million for unfairly using bond proceeds to pay reimburse themselves for membership fees they paid to the California Public Securities Association, a lobbying group.

TCW Funds is liquidating a pair of 2-Star funds within the next two months.

Trades were placed one to two days after the orders arrived by fax or mail, causing some customers to get inferior prices from late 2003 until June 2011, the Financial Industry Regulatory Authority said in a statement.

Eaton Vance is closing its Eaton Vance Atlanta Capital SMID-Cap to new investors on January 15, 2013, according to a Securities and Exchange Commission filing.

Aston Asset Management has fired Todd-Veredus Asset Management, the subadvisor to two of the firm's small-cap funds, Morningstar reports.

Oppenheimer Funds’ New York Board has added two new members to its roster in the form of Joanne Pace and Admiral Edmund Giambastiani, Jr.

After the landmark Dodd-Frank financial reform bill and continued calls for tighter scrutiny of the financial sector, 2012 brought a flurry of congressional hearings, public comments on rule proposals, and lobbying and public posturing by various stakeholders. Scores of new rules and regulations that could affect the advisory industry made their way through varying stages of development. But for all the noise this year, what actually changed?

President Obama, facing a budget stalemate with Republicans, urged leaders of both parties to assemble an interim bill to keep taxes from rising on middle- income Americans as they work on a more comprehensive plan.

Robert Khuzami, who led the U.S. Securities and Exchange Commission’s enforcement division’s pursuit of financial industry wrongdoing related to the subprime crisis, plans to step down as early as next month, three people with knowledge of the matter said.

President Obama is urging lawmakers to put together a package to avoid the fiscal cliff with the next 10 days.

"The House did not take up the tax measure today because it did not have sufficient support from our members to pass," Boehner said in a statement after Republicans broke from a conference where leaders made a last-minute appeal for votes.