24 ĐỀ THAM KHẢO KÌ THI TUYỂN SINH VÀO LỚP 10 MÔN TIẾNG ANH SỞ GIÁO DỤC HẢI DƯ...
Financial Regulation Changes
1. Regulatory Update on Financial Reform
Prof. William H. Byrnes &
Prof. Stephen Polak
International Tax & Financial
Services Graduate Program
AICPA PFP
11 Jan. 2011
2. wbyrnes@tjsl.edu Tel: (619) 374-6955
spolak@tjsl.edu Tel: (802) 338-7009
www.profwilliambyrnes.com
Master of Science of Laws (non-lawyers)
Master of Laws (lawyers)
Doctor of Science of Laws (lawyers and non-lawyers)
International Tax, Financial Services, Wealth Management,
Compliance, Risk Management,
Financial Instruments, Financial Crimes
www.advisorfyi.com
3. The Wall Street Reform Act
Topics To Be Covered Today
1) Ethical standards for investment advice given
by broker-dealers
2) "Accredited investor" standard for private
placements
3) Mandatory securities agreement arbitration
4) Jurisdiction over investment advisors
5) Regulation of hedge funds and private equity
funds
6) Performance-Based Fees
4. The Wall Street Reform Act
Topics To Be Covered Today
7) Deposit insurance
8) Study of state and federal regulation of
financial planners
9) Indexed annuities
10) Creation of the Federal Insurance Office
11) Surplus lines dealers
12) Performance-Based Fees
5. Introduction to the Dodd-Frank Wall Street
Reform and Consumer Protection Act
The Dodd-Frank Wall Street Reform and Consumer
Protection Act (Wall Street Reform Act), signed into
law by President Obama on July 21, 2010.
It was developed as a comprehensive response to
the financial crisis of 2007-2010.
6. What Did President Obama Say About the Act
President Obama summarized its purpose shortly
after signing, saying that:
“For years, our financial sector was governed by
antiquated and poorly enforced rules that allowed
some to game the system and take risks that
endangered the entire economy.”
7. Who Will Be Affected
All financial professionals—including:
Insurance producers,
Investment advisors,
Broker-dealers, and
Others
… will be forced by the Act to change the way they
do business. These changes a steep learning curve
and extract significant compliance costs for most
professionals.
8. New Rules, Studies, Reports
81 new studies will be conducted
93 new reports will be completed, and
520 rules will be created.
9. New Agencies
Federal Insurance Office
subdivision of the Treasury Department;
Consumer Financial Protection Bureau (CFPB),
created by the Board of Governors of the Federal
Reserve
Office of Financial Protection for Older Americans
Office of Financial Literacy,
Financial Stability Oversight Counsel
monitor systemic risks to the economy.
10. Biggest Change For Financial Advisors
Shift of regulatory authority … from the SEC to the
state governments.
Modification of the “accredited investor” standard
Mandatory securities arbitration clauses,
performance-based fees,
Bring most hedge fund (and other private fund)
advisors under the SEC’s jurisdiction.
11. Biggest Change For Financial Advisors (cont.)
Broker-dealers and their registered representatives
will be the Act’s grant of authority to the SEC to
apply a fiduciary standard to broker-dealers.
12. 1. Ethical standards for investment advice given
by broker-dealers
The Act grants the SEC the power to impose a
fiduciary standard on broker-dealers and their
authorized representatives.
Under the fiduciary standard, broker- dealers
would be required to put their client's interests
ahead of their own interests, meaning that they
would be required to act in their clients' best
interests and disclose any conflicts of interest.
13. 2. "Accredited investor" standard for private
placements
The Act requires the SEC to evaluate the definition
of "accredited investor,“ as it applies to individuals,
and modify it as necessary "for the protection of
investors, in the public interest, and in light of the
economy.“
The SEC is given great latitude to define the term,
except that the Act includes a specific provision
requiring the SEC to revise the minimum net worth
standard. This will reduce the number of investors
who qualify as accredited investors.
14. 3. Mandatory securities agreement arbitration
The Act permits the SEC to prohibit or restrict
mandatory securities arbitration agreements.
– At present, contracts between brokers, dealers, and
investment advisors and their clients often include
arbitration clauses.
– These arbitration clauses are typically upheld when
challenged in the courts.
– Pushing disputes out of arbitration and into the courts
will drastically increase expenses for both sides of
these disagreements.
15. 4. Jurisdiction over investment advisors
States, and not the SEC, are given jurisdiction over
investment advisors who manage between $25
million & $100 million in assets.
But investment advisors who are registered in 15
or more states are subject to SEC regulation
regardless of the amount of their assets under
management.
Prior to the Act, advisors with $25 million or more
in assets under management were subject to SEC
regulation.
16. 5. Regulation of hedge funds and private equity
funds
Hedge funds and private equity firms with > $150
million in assets under management have to
register as investment advisors with the SEC
Private funds advisors that are exempted from
registration by the SEC because they have < $150
million in assets under management will still be
subject to enhanced recordkeeping requirements.
These records must be kept open to inspection by
the SEC.
17. 6. Advisor disclosures
The SEC is required by the Act to study investor
access to information about advisors’ professional
backgrounds, including "disciplinary actions,
regulatory, judicial, and arbitration proceedings,
and other information."
The SEC is required to implement its
recommendations within 18 months of completing
the study.
18. 7. Deposit insurance
The Act permanently extends the FDIC's $250,000
guarantee for deposits at banks, thrifts, and credit
unions.
The FDIC guarantee was previously $100,000 per
institution, but the guarantee was temporarily
raised to $250,000 during the financial crisis.
19. 8. Study of state and federal regulation of
financial planners
The GAO is required to study the adequacy of state
and federal regulations designed to protect
investors from persons who hold themselves out
as financial planners "through the use of
misleading titles, designations, or marketing
materials.
20. 9. Indexed annuities
The Act conclusively settles the question of
whether indexed annuities are securities subject to
the SEC's jurisdiction by excluding indexed
annuities from the definition of "security."
21. 10. Creation of the Federal Insurance Office
Insurance regulation has generally been left to the
states; however, the Wall Street Reform Act may
foreshadow future Federal oversight of the
industry.
The Act creates the Federal Insurance Office within
the Treasury.
– The Office will monitor all components of the insurance
industry excluding the health, crop, and long-term care
sectors.
22. 11. Surplus lines dealers
The Act streamlines the regulation of surplus lines
insurance by making the insured's home state the
sole regulator and tax collector in surplus lines
transactions.
23. 12. Performance-Based Fees
The Act reduces the pool of clients who can be
charged performance-based fees.
– Currently, “qualified clients” can be charged
performance fees if they have at least $750,000 in
funds under management, or a net worth of over
$1,500,000.
– The Reform Act requires that the SEC adjust these
funds under management and net worth threshold
amounts to account for inflation starting on July 21.
2011, and then index them for inflation every five
years thereafter.
24. What You Don’t Know Yet Might Hurt You: A
Broker’s Duties Under the Financial Reform Act
Changing Standards
– Broker-dealers are presently subject to a suitability
standard under which a broker-dealer must
reasonably believe that his or her advice is suitable to
the client’s financial situation.
– The Act permits the SEC to step-up broker-dealers’
duties to their clients to a fiduciary standard on par
with the standard applied to financial advisors. Under
the fiduciary standard, broker-dealers would be
required to put their client’s interests ahead of their
own interests.
25. Fiduciary Duty Standard
Current bifurcated standard IAs v. BDs
BDs = suitability standard
“reasonably believe” that advice is suitable to the financial
situation
“an adequate and reasonable basis” for recommendations
“reasonable efforts” to obtain information about the
financial status
not required to disclose COI
26. Fiduciary Duty Standard
universally apply IAs standard
broker-dealers / reps
Insurance agents caught
act in clients’ best interests
disclose any conflicts of interest
not factor commissions into advice
disclose if limited range of financial products
27. Consultants to Employee Benefits Plans to be
Classified as Fiduciaries
The Department of Labor is looking to significantly
broaden the definition of who is a fiduciary when
giving investment advice to employee benefit
plans and plan participants.
Many plan consultants who previously escaped
classification as fiduciaries will soon be subject to
the conflict of interest and self-dealing rules that
are applied to plan fiduciaries, creating a
compliance nightmare for those advisors.
28. The Proposed Regulations greatly expand the types of
activities that can result in fiduciary status
Rendering advice, appraisals, or fairness opinions
concerning the value of securities or other
property;
Making recommendations as to the advisability of
investing in, purchasing, holding, or selling
securities or other property; or
Giving advice or recommendations as to the
management of securities or other property.
29. Wall Street Reform Act Re-Defines
“Accredited Investor”
The definition of “accredited investor” includes
both high-net-worth individuals and institutional
investors.
Individuals are qualified as accredited investors if
they satisfied either a yearly income standard or a
net-worth standard.
The Wall Street Reform Act amends the net-worth
standard, although it leaves the income standard
alone.
30. "Accredited investor" standard for private
placements
1982 $1m standard of all assets = 1.87% of pop
$200/$300 married threshold will remain for now
2011-14: $1m asset threshold excluding home
Evaluate income threshold
2015: must raise asset threshold
> 2.5m? net investments (2006 proposal)
Investor pool will return to 1.3% of pop.
31. Wall Street Reform Act Re-Defines
“Accredited Investor” (cont.)
The Act amends the net-worth standard, although
it leaves the income standard alone.
Under the income standard an individual with:
– Annual income of $200,000 in each of the two most
recent years, or
– Married couple with an annual income of $300,000 in
each of the two most recent years, is an accredited
investor.
– Net worth rule excludes an investor’s principal
– residence from the net worth calculation.
32. Fewer Clients Qualify for
Performance-Based Fees
The Wall Street Reform Act reduces the pool of clients
who can be charged performance-based fees.
The Act requires that the SEC adjust these funds under
management and net worth threshold amounts to
account for inflation starting on July 21. 2011, and
then index them for inflation every five years
thereafter.
Any adjustment to the qualified clients test will
reduce the pool of clients who can be charged
performance-based fees.
33. “Qualified Clients" standard
for performance based fees
1996: $750K managed or net worth $1.5M
July 21, 2011 must be adjusted for inflation
Minimum required adjustment - $100K
Probably $1M managed / $2M net worth
Every five years re-indexed for inflation
34. Mandatory Securities Arbitration Clauses
on the Chopping Block
The Act expressly gives the SEC the power to
prohibit or restrict mandatory securities
arbitration agreements.
Although securities arbitration would still be
permitted if the SEC decides to act, arbitration
would likely be used only at the client’s option,
effectively shifting the choice of whether to
arbitrate from financial professionals to their
clients.
35. Hedge Fund Must Now Register with the SEC
Under the New Wall Street Reform Act
Who Must Register?
– The Act requires advisors to hedge funds and private
equity funds with > $150 million in assets under
management to register as investment advisors with
the SEC.
– Managers with assets under management of between
$25 million and $150 million will be required to register
with state regulators.
– Those with < $25 million in assets under management
are exempt from the federal registration requirement,
but may be subject to registration requirements under
state law. Private Advisor Exemption Under the
Advisors Act
36. Registration Exemptions
Under the Wall Street Reform Act
1. Mid-Sized Private Fund Advisors—An advisor who acts solely
as advisor to private funds and who has less than $150
million in assets under management
2. Venture Capital Fund Advisors—Advisors who act as advisors
only for venture capital funds
3. Foreign Private Advisors—Foreign private advisors, if they (1)
do not have a place of business in the U.S., (2) have fewer
than 15 U.S. clients and investors in private funds advised by
the advisor, (3) have assets under management of less than
$25 million (4) do not hold themselves out as an investment
advisor in the U.S., and (5) do not act as advisors to any
registered investment companies or business development
companies
37. Registration Exemptions
Under the Wall Street Reform Act
1. Family Offices—Advisors to family offices,
although the term “family office” is left undefined
by the Act
2. Commodity Trading Advisors—Advisors registered
with the Commodity Futures Trading Commission,
if they do not give advice about securities, and
3. Small Business Investment Company Advisors—
Advisors who exclusively advise small business
investment companies.
38. Registration Exemptions
Under the Wall Street Reform Act (cont.)
These records must be kept open to inspection by
the SEC. Information required to be kept by private
advisors includes:
The amount of assets under management and use
of leverage, including off-balance sheet leverage
Counterparty credit risk exposure
Trading and investment positions
39. Registration Exemptions
Under the Wall Street Reform Act (cont.)
1. Trading and investment positions
2. Valuation policies and practices of the fund
3. Types of assets held
4. Side arrangements or side letters, whereby certain
investors in a fund obtain more
5. Favorable rights or entitlements than other investors
6. Trading practices, and
7. Other information that is appropriate in the public
interest and for the protection of
8. Investors and for the assessment of systemic risk.
40. Confidentiality Protections
Proprietary information provided by funds to the SEC
under the Act is not subject to Freedom of
Information Act requests. Proprietary information
includes non-public information about:
– Investment and trading strategies;
– Analytical and research methodologies;
– Computer hardware and software that hold intellectual
property; and
– Other information deemed proprietary by the SEC.
41. Modernizing Mutual Fund Taxation: Registered
Investment Company Modernization Act
Pass through of foreign tax credits and tax-exempt
interest—The RICM Act permits qualified funds of
funds to pass foreign tax credits and tax-exempt
interest on to investors.
Eliminate preferential dividend rules—The RICM
Act eliminates the preferential dividend rules for
publically offered RICs. Note, however, that
securities laws still govern when a publically
offered RIC is allowed to pay preference dividends.
42. Modernizing Mutual Fund Taxation: Registered
Investment Company Modernization Act
Repeal of the nine year limit on loss carry
forwards—The RICM Act allows a RIC to carry its
losses forward indefinitely.
Net capital losses excluded from earnings and
profits—Under the RICM Act, earnings and profits
of a registered investment company cannot be
reduced by any amount that is not deductible for
tax purposes.
43. Wall Street Reform Act Mandates Study of
Financial Planning Industry
The federal government is taking the first steps toward
regulating financial planners.
Advisors who are also Certified Financial Planners may
ultimately face a second layer of federal regulation.
44. Wall Street Reform Act Mandates Study of
Financial Planning Industry
FINRA Positions Itself to Oversee Advisers:
–The Dodd-Frank Wall Street Reform and
Consumer Protection Act, passed earlier this
year, mandates an SEC study of its investment
advisor examinations and whether delegation of
advisor regulation to an SRO would improve
examinations.
45. New FINRA Rule Restricts Brokers’ Outside
Business Activities
Brokers will face new restrictions on outside businesses
under FINRA Rule 3270, which is set to go into effect
December 15, 2010.
The rule will limit brokers’ investment advisory and
insurance business by requiring brokers to provide their
broker-dealers with prior written notice of their outside
business activities.
46. New FINRA Rule Restricts Brokers’ Outside
Business Activities
Under the new rule, once a broker-dealer receives notice of
a broker's outside business, the broker-dealer will be
required to determine whether the outside business activity
will:
– Interfere with or otherwise compromise the registered
person’s responsibilities to the member and/or the
member’s customers, or
– Viewed by customers or the public as part of the
member’s business based upon, among other factors,
the nature of the proposed activity and the manner in
which it will be offered.
47. Enhanced Disclosures Requirements
The Wall Street Reform Act lays the groundwork for
increased advisor and broker-dealer disclosure
requirements:
– The Act requires the SEC to conduct a study looking for
ways to improve investor access to information about
advisors’ professional backgrounds.
– The Act gives the SEC broad powers to institute
disclosure requirements for broker-dealers.
48. New York Life Insurance Commission
Disclosures
Beginning January 1, 2011 life insurance brokers in
the Big Apple will be disclosing commissions to
consumers. New York is one of the first states that
are mandating life insurance commission details to
be disclosed to clients.
49. New York Life Insurance Commission
Disclosures
Under New York Insurance law an insurance
producer selling or renewing an insurance contract
must disclose the following information to the
purchaser orally or in writing not later than
application for the insurance contract or the
renewal:
–Whether the insurance producer represents the
purchaser or the insurer for purposes of the sale
50. New York Life Insurance Commission
Disclosures (cont.)
–The insurance producer will receive
compensation from the selling insurer based on
the insurance contract the producer sells;
–The compensation insurers pay to insurance
producers may vary depending on a number of
factors, including the insurance contract and the
insurer that the purchaser selects, the volume of
business the producer provides to the insurer or
the profitability of the insurance contracts that
the producer provides to the insurer; and
51. New York Life Insurance Commission
Disclosures (cont.)
–The purchaser may obtain information about
the compensation expected to be received by
the producer for the sale and for any alternative
quotes obtained by the producer by requesting
such information from the producer.
52. New York Life Insurance Commission
Disclosures (cont.)
If a purchaser of a life insurance contract
requests more information about the producer’s
compensation prior to the issuance of the
insurance contract, the producer is required to
disclose the following information to the
purchaser in a prominent writing no later than
the issuance of the insurance contract, (except
that if time is of the essence to issue the
insurance contract, then within five business
days).
53. New York Life Insurance Commission
Disclosures (cont.)
A description of the nature, amount and source
of any compensation to be received by the
producer or any parent, subsidiary or affiliate
based in whole or in part on the sale;
A description of any alternative quotes
obtained by the producer, including the
coverage, premium and compensation that the
insurance producer or any parent, subsidiary or
affiliate would have received based in whole or
in part on any such alternative quotes;
54. New York Life Insurance Commission
Disclosures (cont.)
A description of any material ownership
interest the insurance producer or any
parent, subsidiary or affiliate has in the insurer
issuing the insurance contract or any
parent, subsidiary or affiliate;
A description of any material ownership
interest the insurer issuing the insurance
contract or any parent, subsidiary or affiliates
has in the insurance producer or any parent,
subsidiary or affiliate; and
55. New York Life Insurance Commission
Disclosures (cont.)
A statement whether the insurance producer is
prohibited by law from altering the amount of
compensation received from the insurer for the
sale.
If the purchaser requests more information about the
producer’s compensation after issuance of the insurance
contract but less than three years after issuance, the
insurance producer shall disclose to the purchaser in a
prominent writing the information as discussed in the
above paragraph within thirty days.
56. The Department of Labor Releases Final
401(k) Disclosure Rules
They mandate that plans provide adequate disclosures
about the plan and about investment options under the
plan, including information about:
– The plan’s identification and general operational
characteristics,
– Administrative expenses, and
– Individual expenses.
Disclosures must be made on the basis of the plan’s most
recent, available information.
57. NCOIL Adopts Beneficiaries Bill of Rights as
Retained Asset Accounts under Fire
The National Conference of Insurance Legislators
(NCOIL) Executive Committee has adopted the
model Beneficiaries’ Bill of Rights—which would
restrict the insurance industry practice of using
retained asset accounts (RAAs) to pay policy death
benefits. The model would require “appropriate
disclosure” when benefits will be issued through
an RAA.
58. New York Court of Appeals Upholds STOLI
Arrangement Under Pre-2010 Law
–In a big win for STOLI promoters, the Court of
Appeals of New York—the state’s highest
court—held that New York’s insurable interest
law was not violated when an insured purchased
a life insurance policy and immediately assigned
the policy to a third party who did not have an
insurable interest in the insured’s life.
59. 2010 New York Statute Prohibiting STOLI
Although STOLI investors won the day in
Kramer, New York is no longer a safe haven for
such transactions. In 2009, the New York State
Legislature passed life settlements legislation
that prohibits STOLI policies like those at issue in
this case. The New York statute that became
effective May 18, 2010, would prohibit
immediate policy assignments as described in
the Kramer case.
60. Recent Delaware STOLI Case
Is a Big Win for Insurers
An insurer recently won a major victory when the U.S.
District Court for Delaware voided a life insurance
policy that was purchased as part of a STOLI
transaction. The case—Principal Life Insurance Co. v.
Lawrence Rucker 2007 Insurance Trust—is significant
because the court voided the policy for lack of an
insurable interest based on the finding of insured’s
intent to sell, even though the insured had not
identified a particular purchaser for the policy at the
time it was issued.
61. STOLI to STOA: First Drops
in a Gathering Storm
Some STOA variants are simply avant-garde
STOLI, replacing life insurance with annuity death
benefits.
In this breed of STOA, investors pay an individual to
serve as annuitant on a variable annuity contract that
includes a guaranteed minimum death benefit.
The annuitant is typically a person with a short life
expectancy, such as the terminally ill.
On the death of the annuitant, the guaranteed
minimum death benefit is paid to the investor.
62. NCOIL Adopts Model Act Requiring Insurers to
Inform Consumers of Settlement Options
In a contentious move, the National Conference of
Insurance Legislators (NCOIL) executive committee
voted unanimously to adopt the Life Insurance
Consumer Disclosure Model Act, (Model Act),
which requires life insurance carriers to notify
policy owners of settlement options when the
policy owner is considering surrendering the policy
or when the policy is set to lapse.
63. NCOIL Adopts Model Act Requiring Insurers to
Inform Consumers of Settlement Options
Not all policy owners have a right to disclosure about
settlements under the Model Act. The disclosure
requirement applies only where the insured is sixty years
old or older or “is known by the insurer to be terminally ill
or chronically ill” and
The policy owner requests the surrender, in whole or
in part, of a policy.
The policy owner requests an accelerated death
benefit under a policy.
The insurer sends notice to the policy owner that the
policy may lapse.
64. Indexed Annuities: Still Insurance
After a series of contradictory indicators from the
SEC and the courts, Congress finally settled the
question of whether fixed indexed annuities (FIAs)
are securities or insurance products.
The Dodd-Frank Wall Street Reform and Consumer
Protection Act—signed into law by President
Obama on July 21, 2010—conclusively excludes
FIAs from regulation as securities by the Securities
and Exchange Commission (SEC).
65. Classification of Annuities
There are clear examples of annuity products that fall on
each end of the spectrum.
― Variable annuities—which shift most or all of the
investment risk to the purchaser and away from
the insurance company—are the obvious case of a
product that falls on the “investment” side of the
spectrum.
― Fixed annuities—which guarantee the purchaser’s
return, shifting almost all investment risk to the
insurance company—are the clearest example of a
product falling on the insurance side of the
spectrum.
66. FDIC Guarantee Increased to $250,000
In order for an account to be treated as a trust account, it
has to satisfy the following requirements:
― The account title must include a designator signifying
it’s held in a trust relationship. Payable on death
(POD), in trust for (ITF), and as trustee for (ITF) satisfy
this requirement.
― Beneficiaries must be named in either deposit
account records or identified in the trust document, if
any.
― To be eligible for the guarantee, a beneficiary must be
either a living person or an IRS qualified charity or
non-profit.
67. The Federal Insurance Office
The FIO is not a regulatory or supervisory body, but will
serve the following functions:
1. Gathering information about the insurance
industry, conducting studies on the industry, and
generating reports for Congress and Executive Branch
2. Locating regulatory gaps and other issues in the
insurance industry that may contribute to systemic
risk
3. Administering the Terrorism Risk Insurance Program
4. Monitoring minority and other underserved
communities’ access to affordable insurance
68. The Federal Insurance Office
4. Make recommendations to the Financial Stability
Oversight Committee (also created
5. by the Act) that particular insurers be supervised as a
nonbank financial company by the Federal Reserve
6. Coordinate the Federal response to international
insurance related matters, and
7. Negotiate international trade agreement that
preempt inconsistent state regulations.
69. IRS Guidance Provides Safe Harbor for Policies
Maturing After Age 100
The Service will not treat a policy as a MEC or otherwise
deny its tax status as a life insurance contract if the contract
satisfies the requirements of the safe harbor.
The Tax Code treats a contract as a life insurance policy if it
either:
― Satisfies the cash value accumulation test or
― Satisfies both the Code’s guideline premium
requirements and falls within the Code’s cash value
corridor.
70. Vigorous Debate over Qualified Appraisal
Standard for Valuation of Donated Policies
MassMutual Financial Group representatives recently sent a
letter to Treasury Department officials proposing an
alternative to the valuation methods required for taxpayers
who want to take a charitable contribution deduction on
their income taxes for a donated life insurance policy. The
letter makes two proposals:
― That the qualified appraisal requirement for sizeable
charitable donation be satisfied by an issuing carrier’s
statement of the policy’s value, and
― That the Treasury apply existing IRS valuation safe
harbors when valuing a policy for charitable donation
purposes.
71. Can Term Life Coupled with a Mutual Fund
Investment Replace a Variable Universal Life Policy?
The first distinction between the mutual fund strategy
and VUL is found in the insurance component of each
option. Because term insurance provides coverage in the
mutual fund strategy, the insurance coverage will be time
limited to ten, fifteen, twenty, or thirty years.
Unlike term insurance, VUL is permanent
insurance, meaning that a VUL policy will stay in force
until the policy matures—usually after the insured’s
100th birthday. Permanent vs. Term Insurance Fees
Investment Options Income Tax Differences
72. More Consumers Buy
Guaranteed Living Benefits Riders
Annuities customers purchased GLB riders
87 percent of the time when the riders were
available.