July 9, 2007
The International Association of Small Broker Dealers and Advisors
1620 Eye Street, NW, Suite 210 Washington, DC 20006
202-785-8940 ext. 108
The International Association of Small Broker-Dealers and Advisers,www.iasbda.com submits the following comments on the above referenced proposed guidance.It believes that in theory such guidance is always both welcome and useful useful but in practice is always especially challenging for small firms.:
On a more general level we believe the regulators should move quickly to publish this guidance but also should monitor how it works especially for small firms. We see little evidence that small firms were involved in its development which is all the more reason to insure they are not disadvantaged by it.There is also an anomaly in this guidance if it drives firms to use oral communications in place of electronic communications because they cannot be reviewed. Most firms today discourage email communications with retail customers because they do not want a review able record and the logical response to this initiative is to further discourage such emails. It is possible therefore that a tiered requirement here, allowing firms with less than 15 employees to be held to a lesser review requirement in order to encourage a strong maintenance requirement should be considered. This would be not unlike the internal controls exception for small firms.Finally this may be a good opportunity for the regulators to explain the differences between tiered regulation and principles based regulation.We have seen references to both but believe there are significant differences especially for the small firms.
Peter J. Chepucavage
202-785-8940 ext 108.
Donate to fallenheroesfund.org