Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, November 5, 2009

NASAA Expresses Concern over Proposed Expansion of FINRA Authority over Investment Advisers

Earlier today I blogged on the proposed Investor Protection Act that the House Financial Services Committee passed earlier this week.  Here is NASAA's statement on the bill and, in particular, whether FINRA should regulate investment advisers:

NASAA appreciates the Committee’s efforts to strengthen investor protection. While we continue to have concerns over certain aspects of the Investor Protection Act that will not serve investors, we look forward to working with the Committee in its efforts to strengthen the financial services regulatory framework and provide the best possible protections for American investors.

State securities regulators also appreciate Chairman Frank's concern over the far-reaching consequences of an amendment introduced by Ranking Member Spencer Bachus to provide the SEC with the authority to empower FINRA to enforce the fiduciary duty provisions in the Investment Advisers Act against not only broker-dealer members but also any affiliated investment advisory firm or any associated person. The amendment would give FINRA sweeping rule-making authority without any meaningful analysis or study of its implications. NASAA remains opposed to any effort to expand the jurisdiction and authority of private, membership organizations into an area that is more appropriately the province of government.

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