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SEC Chairman Gary Gensler joins Investor Advisory Committee to propose new investment adviser protection rule.

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On March 3, Gary Gensler, the chairman of the US SEC, said in an article on the official website of the SEC that he had joined the Investor Advisory Committee….

SEC Chairman Gary Gensler joins Investor Advisory Committee to propose new investment adviser protection rule.

On March 3, Gary Gensler, the chairman of the US SEC, said in an article on the official website of the SEC that he had joined the Investor Advisory Committee. The committee recently submitted a new investment adviser protection rule. According to the provisions of Congress in 2010, this rule extends the custody rule to cover all assets of investors, not just their funds or securities. The proposed rules will also require a written agreement between the consultant and the custodian, increase the requirement for foreign institutions to act as the custodian, and explicitly extend the safeguard rules to discretionary transactions.

The Chairman of the US SEC said that the new rules were being drafted, and the encrypted trading platform might not be a qualified custodian

Interpretation of the news:


Gary Gensler, the current chairman of the US Securities and Exchange Commission (SEC), recently joined the Investor Advisory Committee that proposed a new investment adviser protection rule. The said rule entails extending the custody rule to cover all assets of investors, instead of solely focusing on their funds or securities. This move aligns with the Congress’ provisions in 2010 and intends to protect investors against fraud and ensure that their assets are safely managed.

Moreover, the proposed rules mandate a written agreement between consultants and custodians, which strengthens the accountability measures between both parties. It also increases foreign institutions’ requirements to act as a custodian to ensure that they comply with the custody rule’s standards. Furthermore, the safeguard rules are explicitly extended to discretionary transactions to make sure that investments made by investors align with their objectives and interests.

This new investment adviser protection rule serves as a critical attempt by the SEC to enhance its regulatory power in finance. Providing investors with a more comprehensive coverage of their assets under the custody rule can minimize the risk of fraudulent and unauthorized transactions. Investors can now have more confidence in financial advisors and broker-dealers as the regulations aim to protect them from misconduct.

The SEC’s move to review and propose investor protection rules seems timely as the financial landscape evolves. Despite the technological advancements and the changing nature of finance, the SEC remains steadfast in strengthening the regulations that protect investors. The role of the Investor Advisory Committee in proposing this rule highlights the SEC’s commitment to ensuring transparency and accountability in the financial industry for the benefit of the investors.

In summary, the SEC Chairman’s recent announcement of joining the Investor Advisory Committee to propose a new investment adviser protection rule signifies the agency’s intention to enhance its regulatory power in finance. The proposed rules aim to extend the coverage of the custody rule to all assets of investors, increase foreign institutions’ requirements, and explicitly extend the safeguard rules. Ultimately, these measures intend to provide a more comprehensive coverage of investors’ assets and protect them from fraud and misconduct.

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