More On Legal & Compliancefrom The Advisor's Professional Library
- Code of Ethics Rule The Code of Ethics Rule, found in Rule 204A-1, uses severe consequences for violation to help ensure investment advisors will do the right thing.
- U.S. Securities and Exchange Commission Information This information sheet contains general information about certain provisions of the Investment Advisers Act of 1940 and selected rules under the Advisers Act. It also provides information about the resources available from the SEC to help advisors understand and comply with these laws and rules.
Rep. Barney Frank (D-Massachusetts), chairman of the House Financial Services Committee, along with Rep. Steve Cohen (D-Tennessee) asked that the FINRA amendment--which was originally proposed by Rep. Spencer Baucus (R-Alabama)--be deleted. Baucus said during the House floor debate that he proposed the amendment post the Bernie Madoff ponzi scheme, and felt it was necessary because the SEC failed to properly exam Madoff's firm. Baucus did say, however, that he would agree to strike the Finra provision to the financial services bill at this time and explore other remedies. Frank responded that he agreed with Baucus's concerns, but was swayed by concerns expressed by the Texas Securities Administrator that the provision would delegate too much authority to FINRA.
Frank did acknowledge, however, that "there is a role for FINRA" and said Congress will continue to monitor the SEC and hold oversight hearings next year to determine "how best the SEC can [use] the resources of FINRA."
David Tittsworth, executive director of the Investment Adviser Association (IAA) in Washington, says that while he's "pleased that the amendment passed without any opposition, the big question now is whether the Senate can get a bill passed. We're going to be dealing with this [FINRA issue] well into 2010."