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FINRA Set to Pause Its Push to Be the Investment Advisor Regulator

The Doss Firm

On February 7, 2013, FINRA CEO Richard Ketchum, in an interview with InvestmentNews, stated that FINRA has stopped its push to be the self-regulatory organization (“SRO”) for investment advisors. In 2012, FINRA advocated for legislation that would shift advisor oversight from the SEC to one or more SROs, but FINRA now takes the position that the legislation is dead for the time being.

However, Ketchum said FINRA is not giving up completely. “We haven’t changed our view…we’ve been at this for four years now…the SRO approach is the most effective, least duplicative way to oversee [advisors].” FINRA has spent almost $2 million in lobbying Congress to pass this legislation that would authorize an SRO to oversee advisors.

Last year, Rep. Bachus was the chairman of the House Financial Services Committee and introduced the SRO bill. However, in the new Congress, Mr. Bachus gave up his seat as chairman and no bill has been reintroduced. Furthermore, the new chairman, Rep. Hensarling, seems to have no interest in an SRO bill.

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