Amendments to Regulation S-P – What Information May an IA Employee Take?

March 02, 2008

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The U.S. Securities and Exchange Commission (“SEC”) announced that its Commissioners will consider at its open meeting scheduled for Tuesday, March 4, 2008, a recommendation by staff to propose amendments to Regulation S-P, which governs the privacy of customer financial information.

According to the SEC, the amendments would specify under Regulation S-P what information that may be transferred when employees of broker-dealers or investment advisers change firms.

Since the SEC’s current interpretation of Regulation S-P, as evidenced by the SEC’s enforcement action against the Next Financial, has resulted in significant challenges to investment adviser representatives departing their previous registered investment adviser firms, it will be interesting to learn whether the SEC will raise the requirements or provide some type of safe harbor for departing investment adviser representatives under Regulation S-P.

Posted by Bryan Hill
Labels: Privacy