As the long list of related news items demonstrates, the treatment of separate accounts of individual customers has been the subject of considerable and extended discussion. Happily, the outcome appears on a course to be consistent with the reasonable expectations of both FCMs and customers, and with operational necessities.  

Improper sales of higher cost shares in mutual funds runs second only to recordkeeping as measured by the number of enforcement actions that the SEC brings. This is an area where firms are best advised to review their procedures.

Two interesting points about the enforcement action. First, while there was a disclosure violation, the failure was to disclose to the ETF Board, rather than to the public.  

Second, the SEC says that it went light on the adviser because of its remedial efforts. However, the settlement agreement does not describe the remedial efforts and it is not obvious how the adviser would correct a past failure to disclose. While it is good that the SEC rewards remedial efforts, the reward…

A substantial number of the FSOC recommendations reflect the agenda of SEC Chair Gensler (e.g., climate disclosure, Form PF amendments, mandatory clearing of US government securities). All of these rulemakings are, to put it mildly, controversial. The FSOC's endorsement of disputed actions taken by the SEC demonstrates how political concerns affect the FSOC's identification of, and recommendations on risk. Many of the risks identified are those for which the government cannot be blamed,…