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Articles tagged by fiduciary

Have Buy Side Firms Been Asleep at the Wheel? In recent years the sell side has justifiably been criticised for its behaviour in the FX market. But should regulators and market participants be taking a closer look at how the buy side operates in this market? Galen Stops reports. The FX industry has been rocked by a number of scandals in recent years and in many cases the implications of these scandals is only now coming home to roost. Two of the largest custodian banks in the world, BNY Mellon and State Street, have agreed $714 million and $530 million settlements, respectively, related to allegations they systematically set disadvantageous rates for their customers in contrast to their claims to be achieving best execution for them.
FX Service Providers Witness Probable Delay of Controversial Fiduciary Rule For those FX providers who were ensnared by the US Department of Labor's (DOL) controversial fiduciary rule, the recent proposed delay of the rule may provide relief. The fiduciary rule, a product of the Obama Administration, would significantly expand the ways in which one can become a fiduciary to a retirement investor by reason of giving investment advice. Certain sales activities to a retirement plan investor or IRA owner, for example, may create a fiduciary relationship, which would result in significant compliance costs and legal risk. It was set to go into effect on April 10, 2017. On March 2, however, the DOL formally proposed delaying the applicability date of the Fiduciary Rule by 60 days. As part of this proposed delay, the DOL has solicited comments from all stakeholders on two central issues: (1) the pros and cons of delaying the full implementation of the fiduciary rule by 60 days; and (2) suggestions on revisions to the rule, including comments on whether the DOL accurately captured the economic costs of the rule on the various financial market industries. Comments on the delay are due by March 17, 2017. Comments on the substantive provisions of the rule are due by April 17, 2017.
FX Global Code Warrants a Close Look by Retirement Plan Fiduciaries Retirement plan fiduciaries, who themselves or through a third party, engage in foreign exchange transactions on behalf of the plan, should be aware of the new FX Global Code (Code). The Code is a noble effort to repair the reputation of the wholesale FX market in the wake of scandals and controversies. Though it does not have the force of law, it can serve as a useful springboard for fiduciaries to buttress risk controls and fiduciary awareness over an industry that seems obscure to some. The Code can catalyse a change from disengagement and insufficient understanding of common (and, in certain instances, controversial) FX practices to engagement and a deeper understanding of a market whose products are in so many investment policy statements and mandates of retirement plans.