The Enforcement Division is focused on advisor disclosures and conflicts associated with bank deposit sweep programs.
Welcome back to Human Capital! I’m Melanie Waddell in Washington. Industry officials are finding a new compliance chore on their plate as the Securities and Exchange Commission plans a crackdown on 12b-1 fees as they relate to advisor disclosures and conflicts associated with bank deposit sweep programs.
Stephanie Avakian, co-director of the SEC’s enforcement division, signaled in a recent speech where the agency is headed with the BDSP initiative: “Cash in advisory accounts is often automatically swept into a money market mutual fund or a bank deposit sweep program,” she said. “A dually registered adviser or an adviser with an affiliated broker-dealer may have a financial interest, a conflict, in recommending one cash investment over another,” she warned.