Ameriprise 2011 Annual Report Download - page 42

reduce risk in banking practices and in securities and derivatives trading, enhance public company corporate governance
practices and executive compensation disclosures, and provide greater protections to individual consumers and investors.
Certain elements of the Dodd-Frank Act became effective immediately, though the details of many provisions are subject to
additional studies and will not be known until regulatory agencies adopt final rules. The impact of the Dodd-Frank Act on
our company, the financial industry and the economy cannot be known until the rules and regulations called for under the
Act have been finalized, and, in some cases, implemented over time.
Accordingly, while certain elements of these reforms have yet to be finalized and implemented, the Act has impacted and
is expected to further impact the manner in which we market our products and services, manage our company and its
operations and interact with regulators, all of which could materially impact our results of operations, financial condition
and liquidity. Certain provisions of the Dodd-Frank Act that may impact our business include but are not limited to
restrictions on proprietary trading and investing in or sponsoring certain types of funds, the establishment of a fiduciary
standard for broker-dealers, the imposition of capital requirements on financial holding companies, the resolution authority
granted to the FDIC, changes in regulatory oversight and greater oversight over derivatives instruments and trading. We will
need to respond to changes to the framework for the supervision of U.S. financial institutions, including the creation of the
Financial Stability Oversight Council (‘‘FSOC’’) and the transition to the FRB as our consolidated regulator and the OCC as
the primary regulator of Ameriprise Bank. For example, if we were to be designated by the FSOC as a systemically
important financial institution, we may become subject to additional regulatory oversight and enhanced prudential
standards, including those related to capital requirements and risk management standards at the parent company level. To
the extent the Dodd-Frank Act impacts the operations, financial condition, liquidity and capital requirements of unaffiliated
financial institutions with whom we transact business, those institutions may seek to pass on increased costs, reduce their
capacity to transact, or otherwise present inefficiencies in their interactions with us.
It is uncertain whether the Dodd-Frank Act, the rules and regulations developed thereunder, or any future legislation
designed to stabilize the financial markets, the economy generally, or provide better protections to consumers, will have
the desired effect. Any new domestic or international legislation or regulatory changes could require us to change certain
business practices, impose additional costs, or otherwise adversely affect our business operations, regulatory reporting
relationships, results of operations or financial condition. Consequences may include substantially higher compliance costs
as well as material effects on interest rates and foreign exchange rates, which could materially impact our investments,
results of operations and liquidity in ways that we cannot predict. In addition, prolonged government support for, and
intervention in the management of, private institutions could distort customary and expected commercial behavior on the
part of those institutions, adversely impacting us.
Our businesses are regulated heavily, and changes to the laws and regulations applicable to our businesses may
have an adverse effect on our operations, reputation and financial condition.
Virtually all aspects of our business, including the activities of our parent company and our various subsidiaries, are subject
to various federal, state and international laws and regulations. For a discussion of the regulatory framework in which we
operate, see Item 1 of this Annual Report on Form 10-K — ‘‘Business — Regulation.’’ Compliance with these applicable
laws and regulations is time-consuming and personnel-intensive, and we have invested and will continue to invest
substantial resources to ensure compliance by our parent company and our subsidiaries, directors, officers, employees,
registered representatives and agents. Any changes to the laws and regulations applicable to our businesses, as well as
changes to the interpretation and enforcement of such laws and regulations, may affect our operations and financial
condition. Such changes may impact our operations and profitability and the practices of our financial advisors, including
with respect to the scope of products and services provided, the manner in which products and services are marketed and
sold and the incurrence of additional costs of doing business. The recent economic crisis has resulted in numerous
changes to regulation and oversight of the financial industry, the full impact of which has yet to be realized. Any
incremental requirements, costs and risks imposed on us in connection with such current or future legislative or regulatory
changes, may constrain our ability to market our products and services to potential customers, and could negatively impact
our profitability and make it more difficult for us to pursue our growth strategy.
Certain examples of legislative and regulatory changes that may impact our businesses are described below.
The Dodd-Frank Act mandates numerous changes to both the regulatory framework in which financial services companies
operate and the specific regulations with which such companies must comply. Amongst the changes to the regulatory
framework are the abolishment of the OTS and the transition of its responsibilities to other federal agencies. As a result,
the OCC became the primary regulator of Ameriprise Bank and the FRB became the primary regulator of our parent
company. We cannot predict how the transition to these new regulatory agencies, or the environment for supervisory
expectations or enforcement actions, will impact us.
Some of the changes resulting from rules and regulations called for under the Dodd-Frank Act could present operational
challenges and increase costs. For example, in the area of derivatives, higher margin and capital requirements, coupled
with more restrictive collateral rules, could impact our ability to effectively manage and hedge risk. Ultimately these
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