The Committee for the Fiduciary Standard will support a self-regulatory organization (SRO) for registered investment advisors (RIAs) “if Congress fails to provide sufficient funding to the SEC to continue oversight of investment advisers,” the advocacy group said Monday in a news release.
The Committee backed Mercer Bullard’s (left) Self-Regulatory Organization for Independent Investment Advisers (SROIIA). It is to be an SRO for RIAs that will require that members adhere to what it calls the “bona fide” fiduciary standard, and would be an alternative to the broker-dealer SRO, FINRA, which has stated that it would like to regulate RIAs.
Bullard, a law professor at the University of Mississippi School of Law, founder of Fund Democracy, and an investor advocate, announced the formation of SROIIA by two of his law students in March.
“The Committee welcomes SROIIA's entry into the market, notes it is an ‘early stage startup’ and looks forward to its development and seeing details about its operating plans to support and enforce the fiduciary standard of conduct,” the Committee said in the announcement. This editor is a member of the Committee.
“SROIIA's raison d'être is enforcing the fiduciary standard under the Advisers Act articulated by the Supreme Court in Capital Gains Research; it could become a central anchor of the investment fiduciary culture that is just now reasserting itself,” Knut A. Rostad, chairman of the Committee and regulatory and compliance officer of the RIA Rembert Pendleton Jackson, told AdvisorOne.
The Committee’s first choice for RIA oversight is a self-funded or adequately funded Securities and Exchange Commission (SEC) and said in its announcement that it “urges Congress to provide the SEC with self-funding or sufficient multi-year funding appropriations, as outlined in the Dodd-Frank Act, to fully carry out its Dodd-Frank mandate and investor protection responsibilities—including regulation of investment advisers.”