Podcast Center
Video Center
Webcasts
Resource Center
Events
July 14, 2011 at 07:02 AM
Growing increasingly frustrated with the lack of funding given to the Securities and Exchange Commission (SEC) by Congress, the Consumer Federation of America (CFA) has reversed its opposition to a self-regulatory organization (SRO) for advisors.
“Having spent the better part of two decades arguing for various approaches to increase SEC resources for investment adviser oversight with nothing to show for our efforts, we have been forced to reassess our opposition to the SRO approach,” said Barbara Roper (left), director of investor protection at CFA, in testimony before the Senate Banking Committee on Wednesday. “Specifically, we have concluded that a properly structured SRO proposal would be a significant improvement over the status quo.”
Roper told Congress that CFA has been “categorically opposed” to an SRO for advisors, “particularly one dominated by broker-dealer interests” like the Financial Industry Regulatory Authority (FINRA), “and particularly if that SRO were given rule-making authority.”
However, Roper told AdvisorOne that if Congress chooses to go the SRO route, FINRA “is almost certain to play some role, at least with regard to its members who are dual registrants.” The question then becomes, she said, “whether it is the sole SRO or whether others step in to fill this function for independent advisers.”
Financial Services Institute (FSI) has been the only advisory group pushing for an SRO for advisors. Dale Brown (left), FSI’s president and CEO, said in a statement that he’s “pleased that CFA agrees” with FSI “that the best way to protect investors is to ensure advisors have the proper oversight” via an SRO.