Articles Tagged with Baccus

Proposed legislation designed to create a self-regulatory organization (SRO) for investment advisers may not be acted on during this Congressional session, according to its sponsor, Rep. Spencer Bachus (D-Ala.). Rep. Bachus, Chairman of the House Financial Services Committee, said earlier this week that no consensus has developed regarding any proposal relating to enhancing investment adviser oversight and that, therefore, no action is imminent.

There has been increasing interest and legislative activity over the past several months relating to investment adviser examinations. While there is almost universal agreement that examination coverage should be increased, there is a sharp division among industry members, regulators and legislators about how to accomplish that goal.

Most observers agree that Rep. Bachus’s bill, if passed, would lead to the Financial Regulatory Authority (FINRA) becoming the SRO for investment advisers. Adviser organizations have split over supporting the bill, with the Financial Services Institute (FSI) as a supporter, and the Investment Adviser Association (IAA) and the American Institute of CPAs strongly opposed. Other investment adviser organizations have also come out in opposition to the Bachus bill, as has the North American Securities Administrators Association (NASAA).
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According to an InvestmentNews poll, 58.7% of 293 advisers who responded to a recent survey support the option of the Securities and Exchange Commission (SEC) charging user fees to defray the costs of increased examinations. This is an increase from a year ago when only 27.8% of 335 responding advisers supported the user fee approach. The poll also concluded that 74.7% of advisers said they oppose permitting the Financial Regulatory Authority (FINRA) from becoming the self regulatory organization (SRO) for advisers.

The increased willingness of advisers to pay user fees suggests that there could be more support for the bill soon to be introduced by Rep. Maxine Waters (D-CA) that would authorize the SEC to charge user fees for advisers to cover or defray the costs of examinations. Rep. Waters’s bill would combat the SRO bill introduced by Rep. Spencer Bachus (R-Al) and Carolyn McCarthy (D-NY).
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