Week InReview | I.R.S. taxpayer advocate warns of 'pay to play' system  | SEC staff cautions fund boards on proper use of fees | Securities firms' culture at the top of FINRA's 2016 agenda |  ICYMI + Binge Reading
Friday, January 8, 2016
Let's recap
In case you missed it . . .
IRS tries to do more with less
Push threatens to create 'pay to play' system
QUOTE OF THE WEEK  
Apparently the Internal Revenue Service is planning to offer 'concierge-level service' to rich people. That phrasing comes from the IRS's taxpayer advocate, who is worried about the poor people who will be denied the concierge-level service, though I am a little puzzled about why you would want concierge-level service from the IRS. I want, like, Amazon-level service from the IRS: efficient but unobtrusive.
Matt Levine
Bloomberg View
Recent SEC sweep exam raises questions
Staff offers advice to mutual fund boards
(Jan 6)  Mutual fund  boards  should have a reasonable process in place to determine whether sub-accounting fees are being used to pay for distribution, the Securities and Exchange Commission Division of Investment Management recommends.  Many of the issues addressed in its guidance were highlighted by a recent sweep examination of mutual-fund complexes, investment advisers, broker-dealers and transfer agents.  The exams raised questions as to whether, in some cases, a portion of fund-paid sub-accounting fees may have been used to pay for activities primarily intended to result in the sale of mutual fund shares. The exams also suggested that existing guidance must be clarified and updated.
Securities firm culture, compliance & risk management
FINRA's 2016 priorities
(Jan 5)  Securities firms' culture and the role it plays in how a firm conducts its business is at the top of the Financial Industry Regulatory Authority's list of regulatory and examination priorities for 2016. ' Our goal is not to dictate a specific culture, but rather to understand how each firm's culture affects compliance and risk management practices,' FINRA's chief executive officer Richard Ketchum said . FINRA said it also plans to grade firms on how many phony bids to buy or sell stock they might have a role in facilitating, a tactic to clamp down on spoofing practices. Other 2016 priorities include seniors and vulnerable investors, private placements and Regulation A+ offerings, and fixed-income securities.  In particular, FINRA will assess whether:
  • policy or control breaches are tolerated
  • control functions are valued within the organization
  • managers are effective role models of firm culture
  • the organization proactively seeks to identify risk and compliance events
  • non-conforming sub-cultures are identified and addressed
Binge reading disorder
Hand-curated, chosen with love
In Milan, a New Spin on a Century-Old Cocktail ( NYT )

12 Travel Apps Worth Keeping in 2016 ( NYT)

Michael Burry, Real-Life Market Genius From The Big Short, Thinks Another Financial Crisis Is Looming (New York Magazine)

El Nino Is So Last Year, Here Comes La Nina to Wreak More Havoc ( Bloomberg)

Creativity Is Not An Accident ( Scott Berkun)
Transparency.
Inclusiveness.
Consensus.