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Digital Advice Platforms: Compliance and Legal Challenges  

Author:  Stephen P. Wink.; Naim Culhaci.; Deric Behar.

Source: Volume 52, Number 13, July 15 2019 , pp.149-156(8)

Review of Securities & Commodities Regulation

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The SEC and FINRA have issued regulatory guidance for registered robo-advisers. The authors discuss this guidance with regard to various compliance issues, including disclosures for the business model, the scope of advisory services, and conflicts of interest. They also discuss the presentation of disclosures, suitability requirements, and compliance programs. They preface their discussion by noting the challenges of complying with Rule 3a-4 under the Investment Company Act, and close with several recent SEC enforcement actions against robo-advisers.

Keywords: Robo-Advisers; SEC Transamerica Order; SEC Wealthfront and Hedgeable Enforcement Orders; FINRA Report on Digital Investment Advice

Affiliations:  1: Latham & Watkins LLP; 2: Latham & Watkins LLP; 3: Latham & Watkins LLP.

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