Financial Regulatory Forum

Groups urge Congress to let SEC charge fees for adviser exams

By Guest Contributor
December 13, 2013

By Emmanuel Olaoye, Compliance Complete

WASHINGTON, Dec. 13 (Thomson Reuters Accelus) - A coalition of groups representing investment advisers and state regulators has asked Congress to support a bill that would let the U.S. Securities and Exchange Commission to charge investment advisers an annual “user fee” for its exams.

In a letter sent to Congress last week, the coalition said the user fees collected by the SEC would fund the agency’s examinations of registered investment advisers. 

The SEC oversees 11, 000 federally registered investment advisers, but SEC Chair Mary Jo White has said that lack of resources could affect the agency’s ability to “enforce compliance with the securities laws in a way that investors expect and deserve.”

Questions about the oversight of investment advisers reached fever pitch when Bernard Madoff admitted using his brokerage firm to steal billions of dollars from his clients.

The Financial Industry Regulatory Authority (FINRA) lobbied Congress for the right to oversee investment advisers but later abandoned the move after intense opposition from the adviser industry.

The bill is called the Investment Adviser Examination Improvement Act of 2013 and is sponsored by Democratic U.S. Representatives Maxine Waters of California and John Delaney of Maryland.

The SEC would calculate the user fees by considering factors such as the size of the adviser, the adviser’s assets under management, and the adviser’s risk profile.

The coalition includes the Consumer Federation of America, the Investment Adviser Association, and the North American Securities Administrators Association.

The group said: “A user fee is the best option to increase investor protection because it is an efficient, economical, and common sense solution to the SEC’s chronic problem of insufficient examination resources.”

(This article was produced by the Compliance Complete service of Thomson Reuters Accelus. Compliance Complete provides a single source for regulatory news, analysis, rules and developments, with global coverage of more than 400 regulators and exchanges. Follow Accelus compliance news on Twitter: @GRC_Accelus)

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