FINANCIAL INDUSTRY AND REGULATION

Examiners to Focus on Firms’ AI Use: ThinkAdvisor reports that the Securities and Exchange Commission's examiners will step up scrutiny of financial firms' use of artificial intelligence next year, reflecting the regulator’s growing concerns about emerging technologies.

Alts Seen as Outperforming Traditional Assets: The Asset reports that high-net-worth investors in Asia-Pacific have an increasing appetite for alternative assets and believe they will outperform traditional portfolios over the long term.

Alts can Buoy and Protect Portfolios, Experts Say: Financial Advisor reports that alternative investments, particularly private equity and private credit, are increasingly proving their worth in the portfolios of high-net-worth and ultra-high-net-worth clients, according to speakers at the Investments & Wealth Institute’s “Focus on Alternatives” conference last week in New York.

Desire for Less-Liquid Alts Higher: The DI Wire reports that Cerulli Associates, an international research and consulting firm, revealed in its third quarter 2024 issue of The Cerulli Edge that the desire to add less-liquid alternatives to managed account platforms has increased continually over the past five years (43.5%) and outranks interest in liquid alternatives (8.7%).

IRS Continuing to Crack Down on Conservation Easement Scams: Financial Advisor reports that potential tax schemes involving conservation easements have been under scrutiny by the Internal Revenue Service for years, and the agency’s latest regulations require taxpayers and advisors to report these types of transactions.

SEC Chair Gensler Vows to Press on: Reuters reports that SEC Chair Gary Gensler said Monday that he would continue his work to protect investors after threats of firing and calls for his dismissal from prominent Republicans and Democrats as the Nov. 5 presidential election approaches.

New Covered Clearing Agency Regulations Adopted: Financial Regulation News reports that the SEC last week adopted rules designed to improve the resilience of covered clearing agencies, including new requirements regarding a covered clearing agency’s collection of intraday margins.

FINRA Reviewing its Day Trading Rules: Investment Executive reports that amid some complaints from investors and brokerage firms alike, the Financial Industry Regulatory Authority is reviewing its regulatory framework for day trading.

Dispute Arises About ESG Costs: The Wall Street Journal reports that private equity firms and their fund investors are sparring over who should bear the expense of responsible-investing initiatives, part of the growing tension over the costs of complying with new environmental, social and governance standards.

Alt Investment Platform iCapital Buys AltExchange: Wealth Management reports that alternative investment platform iCapital signed a definitive agreement to buy AI fintech platform AltExchange, which uses AI and machine learning to aggregate data and manage and complete reporting on alternative investments for financial advisors and asset managers.

POLICY AND LEGISLATION

Financial Professionals Poll Says Federal Debt Level Unsustainable: Financial Advisor reports that an overwhelming percentage of global financial professionals believe the United States’ national debt level is unsustainable, according to a survey released last week, and that the debt level and the ratio of debt to GDP could affect the dollar’s standing as the leading global reserve currency.

Omnibus Spending Bill May Wait Until Next Year: Congressional Quarterly reports that it is increasingly likely there won't be enough time in the five weeks of session remaining after the election for Congress to strike the deals needed to put together thousands of pages of text fleshing out a dozen full-year fiscal 2025 spending bills, requiring another short-term extension to keep the government open.