SIFMA Submits Letter to the SEC Requesting Further Relief from the Prior Written Consent Requirement for Sweep Program

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.

Since the current relief from the requirement is scheduled to expire on March 3, 2015, SIFMA requested that SEC staff reissue the current no-action letter without a sunset date, explaining that the current relief generally works well within the context of member firms' existing system and procedures.

The current relief, according to SIFMA, benefits customers because it allows firms to follow through on their customers' oral instructions and put their opening deposits to work for them immediately in the Sweep Program even as the firm awaits the customers' written consent. Additionally, the current relief helps to mitigate potential conflicts with ERISA, the Code and Treasury regulations insofar as it allows customers' deposits to remain invested through the Sweep Program for the first 90 days.

See: Comment Letter.Related news: SIFMA Submits Letter Requesting Further Relief from Prior Written Consent Requirement for Sweep Program (with Lofchie Comment) (September 16, 2014); SEC Issues No-Action Relief on Rule 15c3-3, Provides Extended Time for Consents to Sweep Accounts (February 27, 2014).