Beyond A Culture of Compliance: Securities Regulators Emphasize Disclosure

Recent statements by securities regulators emphasize that financial firms need to move beyond a "culture of compliance" to ensure that investors have a better understanding of risk and the investments they are purchasing. During his keynote address at FINRA's Annual Conference, held in Washington, D.C., May 20-22, FINRA Chairman and CEO Richard Ketchum recommended firms focus on the quality of the disclosures they provide to their customers.

Disclosure of Conflicts of Interest

Ketchum stated that FINRA is completing its review of industry practices regarding identification and disclosure of conflicts of interest and plans to issue a report that outlines some strong conflict management practices. The quality of disclosure provided to customers is likely to be a major focus of the report, which will be published this summer. "How do we change the dynamic so investors truly understand what they're buying and, likewise, that financial advisers understand what they