Ameriprise 2012 Annual Report Download - page 37

Investment Adviser and Asset Management Regulation
In the U.S., certain of our subsidiaries are registered as investment advisers under the Advisers Act and subject to
regulation by the SEC. The Advisers Act imposes numerous obligations on registered investment advisers, including
fiduciary duties, disclosure obligations and record-keeping, and operational and marketing restrictions. Investment advisers
are required by the SEC to adopt and implement written policies and procedures designed to prevent violations of the
Advisers Act and to designate a chief compliance officer responsible for administering these policies and procedures. Our
registered investment advisers may also be subject to certain obligations of the Investment Company Act based on their
status as investment advisers to investment companies that we, or third parties, sponsor. The SEC is authorized to institute
proceedings and impose sanctions for violations of either the Advisers Act or the Investment Company Act, which may
include fines, censure or the suspension or termination of an investment adviser’s registration. As an outcome of the
Dodd-Frank Act, Congress is considering whether to modify the SEC’s investment adviser examination program by
authorizing one or more self-regulatory organizations to examine, subject to SEC oversight, SEC-registered investment
advisers.
In connection with new rules adopted by the CFTC, certain of our subsidiaries were required to register with the NFA, a
self-regulatory body under CFTC jurisdiction, as a commodity trading advisor and commodity pool operator. The new rules
adopted by the CFTC eliminated or limited previously available exemptions and exclusions from many CFTC requirements
and will impose additional registration and reporting requirements for operators of certain registered investment companies
and certain other pooled vehicles that use or trade in futures, swaps and other derivatives that are subject to CFTC
regulation. Additional regulations continue to be under consideration by the CFTC, including a proposed harmonization rules
that would seek to harmonize the operational, disclosure and reporting requirements of registered investment companies
under CFTC rules with those now required by the SEC under its rules. The CFTC or the NFA may institute proceedings and
impose sanctions for violations of the Commodity Exchange Act and applicable rules relating to commodities and
commodity-related instruments (including stock index futures); sanctions may include fines, censure or the suspension or
termination of registration or NFA membership.
Outside of the U.S., our Threadneedle group is authorized to conduct its financial services business in the United Kingdom
under the Financial Services and Markets Act 2000. Threadneedle is currently regulated by the Financial Services Authority
(‘‘FSA’’), although we expect the FSA’s responsibilities to be transitioned to the Financial Conduct Authority and the
Prudential Regulation Authority during 2013. FSA rules impose certain capital, operational and compliance requirements
and allow for disciplinary action in the event of noncompliance. Additionally, in connection with its recent retail distribution
review, the FSA adopted new rules, which became effective on December 31, 2012, that govern the manner in which
retail clients pay for investment advice provided with respect to retail investment products, including open-ended and
closed-ended funds and structured products. There may be a period of adjustment in the market acceptance of affected
products as the market adapts to these new rules and as the FSA begins to interpret and apply them.
In addition to the above, certain of our asset management subsidiaries, such as Threadneedle’s U.K. and other European
subsidiaries, are required to comply with pan-European directives issued by the European Commission, as adopted by
E.U. member states. For example, Threadneedle and certain of our other asset management subsidiaries will be required
to comply with the Alternative Investment Fund Managers Directive (‘‘AIFMD’’), which must be adopted by all E.U. member
states by July 22, 2013. AIFMD will establish a regulatory and supervisory framework for investment managers performing
management or marketing activities with respect to alternative investment funds, in particular hedge funds, private equity
funds and real estate funds.
Threadneedle companies and activities are also subject to local country regulations in Europe, Dubai, Hong Kong,
Singapore, Taiwan, the U.S. and Australia. Additionally, many of our subsidiaries are also subject to foreign, state and local
laws with respect to advisory services that are offered and provided by these subsidiaries, including services provided to
government pension plans. Foreign and state governments may also institute proceedings and impose sanctions for
violations of their local laws, which may include fines, censure or the suspension or termination of the right to do certain
types of business in a state or country.
ATC is primarily regulated by the Minnesota Department of Commerce (Banking Division) and is subject to capital adequacy
requirements under Minnesota law. It may not accept deposits or make personal or commercial loans. As a provider of
products and services to tax-qualified retirement plans and IRAs, certain aspects of our business, including the activities of
our trust company, fall within the compliance oversight of the U.S. Departments of Labor and Treasury, particularly
regarding the enforcement of the Employee Retirement Income Security Act of 1974, as amended (‘‘ERISA’’), and the tax
reporting requirements applicable to such accounts. ATC, as well as our investment adviser subsidiaries, may be subject to
ERISA, and the regulations thereunder, insofar as they act as a ‘‘fiduciary’’ under ERISA with respect to certain ERISA
clients. ERISA and related provisions of the Internal Revenue Code impose duties on persons who are fiduciaries under
ERISA, and prohibit certain transactions involving the assets of ERISA plan clients and certain transactions by the
fiduciaries to the plans. The Department of Labor is considering proposed regulations that would significantly expand the
scope of who is considered an ERISA fiduciary and what activity constitutes acting as an ERISA fiduciary, while prohibiting
certain additional types of transactions conducted by persons who are considered fiduciaries.
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