SEC Approves Separate Registration For Backoffice Staff, But Lawyers Still Worry

Monday, June 20, 2011 06:30
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SEC Approves Separate Registration For Backoffice Staff, But Lawyers Still Worry

Tags: sec

After a relatively brief revision process, the SEC has given the green light to an unpopular FINRA proposal to regulate a lot of the support staff who have peripheral interactions with investor accounts.

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In theory, the new rule would apply to anyone who could be broadly considered "operations personnel" and those who supervise them.

 

These people would not need a normal securities license or advisory registration, but would receive an all-new license and pass a test.

 

They would also need to achieve continuing education goals.

 

While this is intended to protect investors from having their accounts handed off from registered advisors to somewhat more nebulously regulated data entry clerks and telemarketers, lawyers still worry about the gray areas.

 

Outsourced IT firms and in-house staff who supervise them are still a big question mark.

 

And in smaller firms, in theory, fluid chains of command could result in receptionists needing to register as backoffice staff.

 

Too much regulation? The SEC's done a lot to clarify the rule, but as yet it's hard to tell how -- much less when -- it will be realized in practice.

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