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SEC Standards: Raising the Conduct Bar for Investment Professionals

What financial firms must do to meet the objective of investor protection

The decade-old financial crisis has put consumer protection firmly on the regulatory agenda. Another step in this direction is the new Standards of Conduct for Investment Professionals proposed by the US Securities and Exchange Commission (SEC) with the objective of enhancing transparency in the investor-advisor relationship while ensuring access to different types of advice relationships and investment products. The SEC has invited the public to share its concerns, which will be addressed before the final regulation and the implementation schedule is published.

The proposed standard has wide-ranging implications for investment advisor and broker-dealer firms. Firms will need to disclose material facts related to investment recommendations, ensure that it is in the best interest of the investor, and remove or disclose conflicts of interest. To comply with the SEC Standards, firms must:

  • Determine the business and operational impact
  • Draw up internal compliance strategies based on business footprint and strategic priorities
  • Define an effective implementation roadmap
Kuldeep Shrimali

Senior Domain Consultant, Capital Markets Practice, Banking, Financial Services, and Insurance, TCS


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