July 31, 2012

FINRA off the table for 2012

July 31, 2012

For the moment, FINRA as an Self Regulatory Agency is off the table. H.R. 4624 (the “Investment Adviser Oversight Act of 2012”), which would subject RIA firms to the absurd rule making, inspection and enforcement authority by FINRA, is off the table of this session of Congress.

Not a time for celebrating...

FINRA and its advocates have taken a step back to come up with a better argument and hope the SEC makes no progress on funding, increased exam coverage and credibility. Expect to see this come back in the next session!

As a lesser of two evils, the discussion on RIA Exam Fees is back in circulation. 
On July 25, 2012, Rep. Maxine Waters (D-Calif.) proposed a bill that would would permit the SEC to impose user fees on SEC-registered investment advisors (note SEC only) that will be used solely to enhancing the SEC's examination program.

We see this as a likely reality that more fees are in store for advisors. This will also pave the way for states to implement exam fees.

Sadly, we have yet to see a bill that suggests the SEC actually review its methodology. 

That's politics. We'll keep you apprised of the developments.

February, 2013 Update

Citing a lack of "strong momentum," FINRA has stepped out of the ring and has backed off their efforts to convince Congress that they should oversee registered investment advisors. No doubt they are strategizing on their next move so we will most likely see them resurface at some point. Our view remains that FINRA's long term approach to regulating broker dealers and registered representatives is not a good fit for regulating fiduciaries.


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