| Americas | Articles
The SEC has settled charges against Bloomberg Finance LP for misleading disclosures relating to its paid subscription service, BVAL, which provides daily price valuations for fixed-income securities to financial services entities. The fine acts as a stark reminder for firms to tighten up their due diligence programs.
Bloomberg, one of the largest and most widely used financial data providers in the world, failed to disclose to its BVAL customers that the valuations for certain fixed-income securities could be based on a single data input, not adhering to previous methodologies disclosed to investors. Osman Nawaz, Chief of the Division of Enforcement’s Complex Financial Instruments Unit stated that the matter “underscores that we will hold service providers, such as Bloomberg, accountable for misrepresentations that impact investors”.
This charge against Bloomberg shows that even the most trusted third-party vendors can have deficiencies. With the SEC’s recently proposed new rule, rule amendments prohibiting registered investment advisers from outsourcing certain services and functions without conducting due diligence and monitoring of the service providers, and a clear intention from the SEC and FINRA of making it a priority for firms in 2023, there is a strong need for investment advisers and broker dealers to have stringent due diligence programs to ensure all third-party vendors are duly vetted. Although the proposed rule is still in the early stages of approval, it’s best to look ahead and ensure your due diligence programs are up to par.
How we can help
We can help you understand which regulatory changes apply to you by designing and implementing bespoke regulatory change programs. We can also support your ongoing compliance and work with you to develop risk assessments and compliance monitoring programs to make sure your framework is robust.
Get in touch
