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FINRA Still Urges Regulatory Harmonization for Brokers and Investment Advisors

The Doss Firm

On March 14, 2013, in a speech that took place in Washington D.C., FINRA’s Chairman and Chief Executive Richard Ketchum continued to echo FINRA’s position for uniform regulatory harmonization for broker dealers and investment advisors. Mr. Ketchum stated his support for uniform regulations for brokers and investment advisors beyond only instituting a single uniform fiduciary standard.

Mr. Ketchum noted that FINRA has explicitly supported a fiduciary standard of care for both broker dealers and investment advisors and called the SEC’s recent request for data on the idea “another important step to move the ball forward.”

Mr. Ketchum noted that the SEC’s request also included a discussion of whether investors would be better off if the rules were harmonized in other areas beyond the ethical standard. This could include advertising, supervision, licensing of firms and ongoing education.

He further stated “even if a fiduciary standard were implemented…alone or coupled with other regulatory harmonization…it isn’t a guarantee against misconduct…compliance must be regularly and vigorously examined and enforced to ensure the protection of investors.”

Industry observers believe if far-reaching regulatory harmonization occurs it will place FINRA in the driver’s set to expand its regulatory oversight to investment advisors as well, which is an underlying goal of FINRA’s.

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