July 19, 2010
Congress Finishes Regulatory Reform
Congress put its final stamp on the financial regulatory overhaul Thursday, sending the reform package to President Obama for his signature.
The Senate, 60 to 39, approved the version completed by a conference committee formed last month to reconcile House and Senate versions. The House had approved the conference report June 30. The president is expected to sign the bill next week.
The bill's passage culminated what seemed like endless debate over the most sweeping overhaul in the financial sector since the Great Depression, and represented another major legislative victory for the administration.
Yet as lawmakers heralded the bill's passage, they highlighted the work that is still left up to the regulators to implement the measures.
"We have given the regulators a very detailed framework but I don't think it's up to us to go down to the micro management level. That's what they are there for," Sen. Jack Reed (D-R.I.), said at a press conference before the final vote. Sen. Carl Levin (D-Mich.), agreed the onus will next be on the regulatory agencies.
DOL to Require DC Plans To Disclose Fees in Writing
The Department of Labor issued an interim final rule on fee disclosure in 401(k) plans Thursday. The final Rule 408(b)2 relieves plan sponsors and their fund providers and consultants from having to share and store written documentation on disclosure obligations.
Nonetheless, each party must still make fee disclosures to the DOL and plan participants in writing.
Meanwhile, the DOL is still working on how fees will be disclosed and the substance of that disclosure.
The interim final rule, which also treats pension plans and defined contribution plans differently than welfare plans, will take effect on July 16, 2011.
Aon in $4.9B Hewitt M&A
Looking to diversify it services portfolio, Chicago-based Aon Corp. is acquiring New York-based Hewitt Associates Inc. for $4.9 billion in cash and stock.
With the purchase, Aon acquires a HR consulting and outsourcing firm with more than 3,000 clients across the globe.
SEC Favors Blanket Fiduciary Standard
Securities and Exchange Commission Chairman Mary Schapiro said she personally backs a blanket fiduciary standard for advisers.
In a speech before the Society of Corporate Secretaries and Governance Professionals in Chicago, Schapiro said: "I have long advocated such a uniform fiduciary standard, and I am pleased the legislation would provide us with the rulemaking authority necessary to implement it," referring to the Dodd-Frank Wall Street Reform and Consumer Protection Act.
However, while Schapiro may be bullish on the agency's ability to promulgate a uniform fiduciary standard, that doesn't mean such a rule is in the bag. The SEC is charged with conducting a six-month study on the differences between the fiduciary standard under the Investment Advisers Act of 1940 and the suitability standard non-registered investment advisers are held to by FINRA, with the goal of recommending rules that would bridge troublesome gaps between the two.
Quote of the Week
"The recovery will take time. We just have to be patient and manage it carefully. I donlanket fiduciary standard for advisers.
Federal Reserve Bank of Richmond, Va.