IAA Chief Warns Of Costly Regulations

Compliance costs are likely to go up this year with the “tidal wave” of new Securities and Exchange Commission regulations, warned the head of the Investment Adviser Association in a blog on Wednesday.

Expenses are likely to increase if, as proposed, advisors are given a mandate to pay independent third parties for compliance reviews, said Karen Barr, the IAA’s president and CEO. The expenses will also likely increase with a new anti-money laundering regime and with heightened data reporting requirements proposed for Form ADV, she warned.

She also expects the SEC to propose rules requiring advisors to create transition plans for a major disruption in business, and a proposal mandating annual stress tests at large funds and advisories.

“In 2016 we are also likely to see the re-emergence of Dodd-Frank-mandated rules on executive compensation, a proposal to revise the definition of ‘accredited investor,’ and CFTC requirements related to cross-border swap transactions,” she wrote.

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