Michael D. Burns
Chief Compliance Officer
October 1, 2012
For broker-dealer use only. Not for use with the public.

• Where has Dodd-Frank Led us to Today
• SEC Activities and Status
• Investment Adviser Regulatory Overhaul
• Financial Industry Regulatory Authority (FINRA) Focus
• Department of Labor Fiduciary Focus on ERISA
• Regulatory Environment
For broker-dealer use only. Not for use with the public.

Set Regulatory Framework for Managing Systemic Risk: Financial
Stability Oversight Council (FSOC)
Over the Counter Derivatives are Subject to CFTC and SEC Regulatory
Rules
Establishes a Bureau of Consumer Financial Protection (CFPB)
Federal Insurance Office (FIO) Created to Monitor and Report on the
U.S. Insurance Industry
Office of Credit Ratings (OCR) within the SEC
Mortgage Reform and Anti-Predatory Lending Standards are
Addressed
For broker-dealer use only. Not for use with the public.

BY THE NUMBERS
Systemic Risk & Resolution Authority
Bank Regulation
Private Funds
OTC Derivatives
Payment, Settlement & Clearing
Investor Protection
Securitization
Credit Rating Agencies
Executive Compensation & Corporate Governance
Municipal Securities
Consumer Financial Protection
Mortgage Reform
Federal Insurance Office
Federal Reserve System & Emergency Authorities
Miscellaneous
Total
Rulemakings
42
14
11
140
8
12
12
14
8
2
21
24
2
1
4
315
For broker-dealer use only. Not for use with the public.
2
8
1
3
24
Studies
27
6
5
10
1
29
8
5
5
11
145

SEC Registration requirements Changed from $30 Million to $100
Million
Advisers to Private Funds will Generally be Required to Register with the SEC if the Adviser has Assets Under Management of $100
Million or More
Municipal Securities Rule revisions will require SEC registration of
Advisers when meeting the definition of a “municipal advisor” and giving advice to or on behalf of a municipal entity or obligated party
For broker-dealer use only. Not for use with the public.

• RIA Regulatory Changes
• SIPC Expansion
• Money Market Reform
• Regulatory Environment – Supervision of
Registered Investment Advisers
For broker-dealer use only. Not for use with the public.

• Required RIA firms to deliver to their clients a narrative brochure written in plain English (ADV Part II) – Update by next required
ADV Update
• Part 2A –firm brochure that contains many of the items previously required to be disclosed in the ADV Part II.
• Part 2B –IAR supplement to the Part 2A brochure. The brochure supplement will contain information regarding the educational background, business experience, and disciplinary history (if any) of the IAR.
• Forms are to be updated upon any material event and must be provided in accordance with delivery requirements
• Expanded custody rules were adopted which include audits of securities holdings
For broker-dealer use only. Not for use with the public.

• Suitability Rule overhaul became effective July 1, 2012
• Expanded information to be maintained and evaluated
• Introduced “Hold” recommendations
• Positioning itself as Self Regulator for Registered Investment
Advisers
• Revenue enhancements through fee increases
• Focus on complex product disclosure and training, sales to seniors, expanded public disclosure of disciplinary history and firm reporting of information for expanded oversight and transparency.
For broker-dealer use only. Not for use with the public.

2012 Exam Priorities
• Business Conduct & Sales Practice Concerns o Heightened supervision of complex products o Suitability Reviews (Rules 2111 & 2090)
• Microcap Fraud
• Private Securities Transactions & Outside Business Activities
• Social Media & Electronic Communications
• Cyber Security
For broker-dealer use only. Not for use with the public.

• ERISA applies to both defined Contribution and Defined
Benefit Plans
• Rule 408(b)(2) Plan disclosures required July 1, 2012
• Rule 404(a)(5) Participant Disclosures required August 31,
2012
• DOL withdrew proposal to expand fiduciary definition to cover SEPs, SIMPLEs and IRAs pending a cost/benefit analysis and further review
For broker-dealer use only. Not for use with the public.

• Identification of experienced candidates with no disclosures are becoming much more challenging
• Disclosures are resulting from more than sales practices issues: credit considerations, aggressive litigation and more complex products
• Regulatory focus on consumer protection as well as volatile markets have resulted in increasing disclosures for both firms and advisors
• The economic environment, combined with the real estate market, have resulted in more disclosure than ever on credit concerns
For broker-dealer use only. Not for use with the public.

For broker-dealer use only. Not for use with the public.
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