Newly Proposed Changes to Regulation S-P

May 2008


The SEC’s proposed amendments to Regulation S-P include a new exception to the
notice and opt-out requirements to allow limited information sharing when
representatives move from one firm to another. In the proposing release, the SEC
recognizes that representatives may develop close relationships of trust and confidence
with their clients and the exception is designed to facilitate the efficient transfer of
customer information and allow customers to continue working with their representative
at the new firm. The exception addresses the industry practice of transferring customer
information when a representative moves to a new firm, but imposes restrictions in order
to ensure the information is properly protected. According to the SEC, the exception is
designed to permit limited information sharing by establishing an orderly framework
under which firms with departing representatives could share certain limited customer
contact information and adequately supervise the transfer of information. How does this
new exception affect your responsibilities and obligations to adequately to protect
customer information? Does the exception sufficiently promote investor choice and the
efficient transfer of client contact information? These are just a few of the practical
questions that arise under the proposed exception.


To read the full PDF article, click here.

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