Home \ Blog \ September 13, 2011 – House Financial Services Subcommittee hearing entitled “Ensuring Appropriate Regulatory Oversight of Broker-Dealers and Legislative Proposals to Improve Investment Advisors Oversight.”

September 13, 2011 – House Financial Services Subcommittee hearing entitled “Ensuring Appropriate Regulatory Oversight of Broker-Dealers and Legislative Proposals to Improve Investment Advisors Oversight.”

The hearing focused on the Securities and Exchange Commission’s study that recommended broker/dealers adhere to stronger standards in advising clients, similar to those that apply to investment advisers. Most witnesses were in favor the uniform standard, which would mandate a fiduciary responsibility to the client, with the exception of representatives from insurance agents.

The hearing tackled another issue given that Dodd-Frank gave expanded oversight to investment advisers. The SEC is able to only examine 9 percent of the investor advisor firms in any year, and another study laid out three options how to cover the gap: enhance SEC capacity through the imposition of fees; create new self-regulatory organizations or extend the authority of Financial Industry Regulatory Authority (FINRA) to oversee investment advisor entities. There was considerable difference of opinion as to how the lack of staffing but the idea of expanding authority of the Financial Industry Regulatory Authority was the least objectionable alternative.

 

Hearing video

 

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