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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