The House Financial Services Committee on Thursday released a draft bill that would establish one or more self-regulatory organizations (SRO) to oversee investment advisors. Washington insiders expected the committee to release the draft legislation after its Sept. 13 hearing on the issue.
With the exception of the Financial Services Institute (FSI), industry trade groups were quick to oppose the draft bill, which was introduced by House Financial Services Committee Chairman Spencer Bachus, R-Ala., and which would amend the Investment Advisers Act of 1940 to provide for the registration and oversight of national investment advisor associations, i.e., SROs. The draft states that advisors would have to be members of the SRO, which would report to the Securities and Exchange Commission (SEC).
Blaine Aikin, CEO of fi360, said in statement that "in general, fi360 opposes the bill and still believes that funding the SEC is the right direction for oversight" of advisors. If there is bright spot in the draft bill, he continued, "it is that the proposed bill calls for one or more SROs, rather than the alternative of a single SRO, FINRA," the Financial Industry Regulatory Authority. However, he said, "at a minimum, before something like this legislation is enacted, we would hope that Congress would walk its own talk and call on the GAO to perform a cost-benefit analysis."
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
