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October 13, 2011 at 10:56 AM
Harmonization of advisor and broker rules is an issue that’s “lower on the totem pole” for the Securities and Exchange Commission now, Duane Thompson, who runs his own consulting firm and serves as senior policy analyst with fi360, said Thursday. However, there are clearly areas where harmonization needs to occur.
Thompson, speaking at a forum held by MarketCounsel, a regulatory consulting firm, also said he doubts that a self-regulatory organization bill will pass this Congress. As Thompson reminded attendees, the SEC, under Dodd-Frank, has the authority to harmonize the rules for advisors and brokers without going to Congress for approval, but, as it stands now, harmonization is not a “front burner” issue for the SEC.
But both Thompson and Joe Borg, director of the Alabama Securities Commission, said at the forum that advertising is one area that deserves harmonization. For instance, broker-dealers can air their client testimonials, whereas advisors cannot, Thompson said.
Borg said that if there is an SRO set up and the Financial Industry Regulatory Authority (FINRA) gets oversight of state registered advisors, he’d like to see FINRA report to something like a “council of state regulators.” Says Borg: ”The issue is who oversees FINRA with regards to policies, procedures, rules etc. If the SEC does not have jurisdiction in that arena it should be the states, as I believe an SRO should have government oversight by the appropriate government regulator.”
