NSCP Expresses Strong Concern Over Two Major Rules Issued By SEC
NSCP Signs on to Two Joint Comment Letters to SEC with over Two Dozen Trade Associations
(Cornwall Bridge, CT) September 14, 2023 – The National Society of Compliance Professionals (NSCP), the premier non-profit membership organization for compliance professionals in the financial services industry, signed on to two joint trade association comment letters this week voicing significant concerns regarding two recent major decisions by the U.S. Securities and Exchange Commission (SEC).
In these letters, NSCP along with several other leading trade associations, shared concerns about the potential impact on the financial industry and investors over the SEC’s proposed rules regarding Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers and Safeguarding Advisory Client Assets.
"We are deeply concerned about the potential ramifications of the SEC's proposed rules, specifically as to how they will affect investment adviser and dual registrants’ compliance functions.” said Lisa Crossley, Executive Director of NSCP. “While we fully support the objective of enhancing investor protection, these proposals raise concerns that warrant closer examination.”
The “Conflicts of Interest Associated with the Use of Predictive Data Analytics” proposal, while well-intentioned, may stifle technological innovation within the financial industry. The potential imposition of burdensome compliance requirements could deter the adoption of valuable technological advancements, affecting investors and market efficiency. Similarly, the “Safeguarding Advisory Client Assets” proposal, while aiming to protect investors and their assets, is expansive in scope and would impose higher costs and operational challenges on investment advisers and their compliance personnel, particularly smaller and start-up investment advisers.
“We urge the SEC to thoroughly assess these concerns and engage in meaningful dialogue with industry stakeholders to ensure a balanced approach that serves the best interests of all parties involved,” added Crossley.
Note: While the joint trade association comment letters represent the consensus view of all signers, NSCP joined the comment letter specifically to support those comments pertaining to the compliance burden generated by the rule proposals.
About NSCP
Since 1986, the National Society of Compliance Professionals has been the leading non-profit, membership organization dedicated to supporting compliance professionals in the financial services industry, focusing primarily on investment advisers, broker-dealers, and private funds. NSCP membership offers a wide range of compliance resources, educational opportunities, and regulatory advocacy and engagement. NSCP provides its members with essential information on compliance topics, regulatory insights, and useful tools through its monthly publication, online and in-person events, and within an interactive online community. NSCP members have access to a diverse community of compliance professionals who share their knowledge and expertise.
