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.”