SIFMA Submits Letter Requesting Further Relief from Prior Written Consent Requirement for Sweep Program (with Lofchie Comment)

SIFMA submitted a comment letter to the SEC requesting further relief from the recently imposed requirement under the Financial Responsibility Rules that a broker-dealer obtain prior written consent from a customer before placing customer funds into a sweep program (the "Rule").

On February 26, 2014, SIFMA requested and obtained a no-action letter from the SEC providing relief from the requirement to obtain prior written affirmative consent from a customer to participate in a sweep program. SIFMA stated that it believes this is the appropriate time to address whether a more permanent solution is achievable "in order to avoid a significant expenditure of time, money, and resources" by its member firms.

SIFMA requested further relief from the Rule in the form of two alternative proposed solutions, as discussed in the letter.

Lofchie Comment: The incoming letter is interesting because it demonstrates how expensive and time consuming a new regulatory requirement can be – even a requirement that seems relatively simple.

See: SIFMA Comment Letter. Related news: SEC Issues No-Action Relief on Rule 15c3-3, Provides Extended Time for Consents to Sweep Accounts (February 27, 2014).