SEC Commissioner: Rules between advisors and broker/dealers need to be "harmonized"

Commentary January 15, 2009 at 07:00 PM
Share & Print

SEC Commissioner Kathleen Casey believes rules for investment advisors and broker/dealers are out of sync. Casey said Wednesday she "strongly believed" that rules needed to be "harmonized," according to Reuters news service.

Rules governing financial professionals date back to the early 1900s and have failed to keep pace with the complexity of today's industry. Investors don't understand the difference between investment advisors who give financial advice and broker/dealers who carry out investment transactions, Casey said. Many broker/dealers give investment advice but are not regulated by the same laws that govern investment advisors.

In light of the Madoff ponzi scheme, officials like Casey are now examining governing laws since Madoff ran a broker/dealer and later became an investment advisor. Casey says the idea of creating a self regulatory organization (SRO) for investment advisers is appealing. Furthermore, she said, a merger between the SEC and futures regulator the Commodity Futures Trading Commission would be a valuable and important regulatory reform.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Related Stories

Resource Center