Investment advisers and broker-dealers are subject to extensive regulation
Investment advisers and broker-dealers are subject to extensive regulation and oversight designed to protect clients and customers, whether retail or other. Both regulatory regimes require investment advisers and broker-dealers to adhere to high standards of conduct in their interactions with retail investors, which are intended toencourage both broker-dealers and investment advisers to act in the interests of their investors and minimize conflicts of interests when providing personalized investment advice or recommendations. The two regulatory schemes currently seek to protectinvestors through different approaches.
Principles of fairnessand transparency to relationships between broker-dealers and customers
The two regulatory schemes currently seek to protectinvestors through different approaches operate, focusing in large measure on applying rules embodying principles of fairness and transparency to relationships between broker-dealers and customers. Accordingly,the Exchange Act, the rules thereunder, SRO rules, as well as judicial and Commissioninterpretations of the foregoing, govern a wide variety of brokerage activity related toeffecting securities transactions, including advising customers, executing orders on themost favorable terms, arranging for delivery and payment, maintaining custody ofcustomer funds and securities, and delivering required disclosures such as confirmationsand account statements.465 Exchange Act rules are generally designed to prevent fraud,and underpin broker-dealers' obligations to their customers, while sales practicesobligations are largely imposed by SRO rules and are designed to address unethicalbehavior that may not necessarily be fraudulent. The feder
Proposed Rule Change To Amend the By-Laws of NASD To Implement Governance and RelatedChanges To Accommodate the Consolidation of the Member Firm Regulatory Functions of NASDand NYSE Regulation, Inc., Exchange Act Release No. 56145 (July 26, 2007) ("In theCommission's view, the consolidation of NASD and NYSE member firm regulation is intended tohelp reduce unnecessary regulatory costs while, at the same time, increase regulatory effectivenessand further investor protection. The Commission notes that the Transaction holds the potential toreduce unnecessary regulatory costs because New SRO firms would deal with only one group ofexaminers and one enforcement staff for member firm regulation.").
See, e.g., Guide to Broker-Dealer Registration, supra note 25.
See Exchange Act Release No. 27018 (July 18, 1989). See also IAA Letter, supra note 462.
For example, and as described in Section II.B.2, FINRA rules establish restrictions on the use of non-cash compensation in
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8921 W Sahara Ave
Las Vegas, NV
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