Practical Insights for Compliance Officers [Webinar] - The Election & Dodd Frank

The Election & Dodd Frank

Mr. Cipperman will assess the most impactful regulatory developments of 2016, review results of the recent CCS survey of financial industry C-Suite opinion leaders, and give you his take on the fluid regulatory environment.This webinar was co-hosted with Todd Cipperman of Cipperman Compliance Services on Nov 17th.


 You can download a full copy of the slides from this webinar.



Full video transcript available below:

Let’s get to the election. What’s going to happen now? Well, I will tell you when I first put this presentation together it was before the election so it’s sort of interesting, so it will be interesting to see what happens with the new administration. Certainly, Paul Atkins a former republican commissioner of the SEC is leading the transition team so we see things like third-party compliance reviews as taking on a greater role and that Jeb Hensarling is going to have some role in the administration.

He’s the guy who wrote the Choice Act, which was billed as a full-scale repeal of Dodd Frank. That’s the Choice Act, but what’s interesting I think to keep in mind is the regulatory infrastructure is still in place. Administrations change, but the SEC stays the same. In fact, the top tier of the SEC really doesn’t turn over all that much and a lot of people just keep continuing. Related to that is the growing influence of the enforcement division within the SEC, which became its own division a few years back and has really grown in influence.

I’m not sure that’s going to change given the legacy of Spitzer and Madoff. The political realities here is the United States just elected a guy as a populist anti-Wall Street figure. It’s going to be hard to see how he is going to dramatically reduce regulation in the investment management industry. I guess we shall see and then, of course, you have the what I’ll call the Sanders/Warren influence, which is even though the democrats aren’t a minority they haven’t disappeared. They have a very slight minority. They’re only a couple of seats off in the Senate and a few back in the House.

As I said, they promised filibuster so we’ll see what happens. 


Shane: Right. So Polling Question #5. Will the election be beneficial or harmful for the asset management industry?


Very interesting, 48%. That’s plurality we use that the election results will be beneficial to the asset management industry. That’s great. Let’s hope that is the case. I’m going to go to … Before ending, I’m going roll out. Like I said, I’m going to debut our 2017 predictions for the regulatory environment in 2017. This is hot off the presses so you’re getting a first cut at this. Just to give, two years ago, I went about eight for 10. Last year, I missed. I don’t have time to go through them all, but I went about 500.

I was sort of four. They call it four, three, and three in my top 10. Four I was right on. Three I was dead wrong and three were kind of pushes because there was timing issues, but a couple of them. These are my top 10 predictions for 2017 and I will tell you my crystal ball is murky with the election. One is I do think the fiduciary rule, the DoL Fiduciary Role will be delayed by executive order. I don’t think it’s going away because you would have to do full rule making for it to go away, but I think President Trump will delay it by executive order.

You probably got the idea that I think the SEC will propose third-party compliance exams next year. I don’t know if it’ll be passed, but I think it’ll be delayed. It’ll be proposed. Excuse me. I don’t see the whistleblowers going anywhere. In fact, I think it’ll survive. I think there is going to be more claims because of all these lawyers helping them out. In addition, I think you’re going to see more retaliation cases for firms retaliating illegally against whistleblowers. I think there will be a lot of action around the Choice Act and Dodd Frank. I don’t think we’re going to get rid of private fund and hedge fund registration.

I do think they may raise the threshold above $150 million. It’s something even Barney Frank was in favor of. I think that the regulation of retail advisors and broker dealers will defacto go to FINRA simply because the SEC is not going to focus that much on them. I think we can’t forget the state regulators because my experience is whenever the SEC backs off the state regulators show up and I think you’re going to see two to three precedent-setting enforcement actions coming out of the state regulators.

I do think the Choice Act’s provisions increasing the penalty caps that the SEC has when they bring actions I think that will happen. You’ll see an increase in SEC penalty caps. I don’t think the enforcement division is going anywhere. I think you’re going to see more prosecution of individuals, not necessarily firms. Mr. Atkins is a big fan of prosecuting individuals, but not firms because prosecuting firms just hurt shareholders. I do think the idea of outsourcing all non-core functions, including compliance will continue simply because the market is going to continue to volatile.

Finally, as interesting rates go up, I think both firms and regulators will struggle with bond pricing. Those are my predictions for 2017. I’ll let you known next year how they turn out. I am going to stop there and turn it over to the folks at MCO.

This webinar was co-hosted with Todd Cipperman of Cipperman Services LLC. To learn more visit

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