SEC to Toughen Custody Rules for Broker-Dealers

Monday, 06 Dec 2010 12:58 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
The top U.S. securities regulator said on Monday that she plans to hold broker-dealers more accountable for their customers' assets after Bernard Madoff duped his clients out of billions of dollars.

"We are considering enhancing oversight of broker-dealer custody by providing new information and tools to regulatory examiners," U.S. Securities and Exchange Commission Chairman Mary Schapiro said at an accounting conference.

Months after Madoff was arrested in late 2008 for operating his epic Ponzi scheme, the SEC beefed up its oversight of investment advisers.

Madoff's investment advisory business was registered with the SEC. He was also registered as a broker-dealer and supervised by the SEC and industry-funded watchdog the Financial Industry Regulatory Authority.

The SEC's rule subjects some 1,600 investment advisers who physically hold their customers' assets to a surprise audit to ensure that the assets are really there.

Now the SEC is mulling ways to improve auditors' oversight of broker-dealers.

Currently, law requires auditors to provide assurances that the broker-dealers' numbers are accurate, and that their controls are in place. But that rule is nearly 30 years old.

"We are considering strengthening compliance and controls," Schapiro told conference the American Institute of Certified Public Accountants. Schapiro did not provide a timeline for the rulemaking.

International Accounting Rules

Separately, Schapiro said the SEC would decide in 2011 whether to replace domestic accounting rules with international standards — now used in more than 100 countries.

If the SEC decides to move U.S. companies to the International Financial Reporting Standards, or IFRS, Schapiro said there would be a minimum four-year implementation period.

While the SEC grapples with how to transition companies to the international rules, U.S. and international accounting rule makers are trying to develop a single set of global accounting rules.

"Convergence is a top priority for the SEC," Schapiro said, adding that the new standards must be improvements over the current rules.

This move to one set of accounting standards comes as U.S. regulators are reshaping the supervision of the financial system and Wall Street.

Under the Dodd-Frank legislation, enacted in July, the SEC must adopt more than 100 new rules for markets and financial players.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved