Securities Law Prof Blog

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

Friday, February 8, 2013

FINRA Gives Up Advocating for SRO Responsibilities over Investment Advisers

I missed the story when it appeared, but I ran into Reuters' Suzanne Barlyn at Brooklyn Law School's Conference on the Importance of Compliance today, and she filled me in on the news that FINRA CEO Rick Ketchum has backed away from advocating that FINRA take on SRO responsibilities for investment advisers.  In an interview Ketchum said there was "no sign it can convince lawmakers in Washington to support a change in the way the advisers are regulated anytime soon."  He warns that investors continue to be at risk because the SEC does not have the resources to examine investment advisers on a regular basis. 

So what's the solution?  My understanding is that investment advisers sensibly would prefer one regulator over two and thus resist the idea of any SRO.  Will the SEC be given the resources to expand its examination program over investment advisers?

Reuters, Exclusive: Watchdog backs off over financial adviser regulation

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