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December 28, 2011 at 07:00 PM
Rep. Barney Frank, the straight-talking Massachusetts Democrat who serves as ranking member on the House Financial Services Committee, announced in late November that he won’t seek re-election and plans to retire from Congress at the end of 2012.
Frank will remain a tough and influential legislator throughout 2012 and has vowed to defend the Dodd-Frank financial reform act that bears his name. Recent comments that Frank has made, including those to Investment Advisor, signal that he will vote against House Financial Services Chairman Rep. Spencer Bachus’ legislation calling for a self-regulatory organization (SRO) for advisors. When Investment Advisor asked Frank after an early December speech what he thought about Bachus’ SRO bill, he replied: “I don’t like it.”
Like other industry trade groups that are fighting against Bachus’ bill, Frank said at a Capitol Hill press conference in late November that he’s “skeptical of self-regulatory agencies” and that he would “not want to detract at all from the responsibilities of public agencies.” Frank has been a staunch proponent of boosting funding for the Securities and Exchange Commission.
While Frank’s status as a ranking member on the financial services committee likely won’t prevent an SRO bill from being reported out of his committee, his objections to such legislation “can create a strong partisan bill” that reaches the House floor and “sends a signal” to the Senate about the problems associated with an SRO, says Marilyn Mohrman-Gillis, managing director of public policy for the CFP Board.
An SRO bill, which already looks to be a tough sell in the Senate, will likely not be introduced by Bachus until sometime this spring.
David Tittsworth, (left), executive director of the Investment Adviser Association in Washington, says that while he is “pleased that Mr. Frank shares our concern about the inefficiencies of saddling advisors with an SRO—likely the Financial Industry Regulatory Authority (FINRA) oversight—we believe it is incumbent upon all lawmakers to consider alternative means for providing the SEC with the resources it needs to remain the cop on the beat.” User fees must be considered, Tittsworth says, as they “would allow the SEC to retain its regulatory primacy without adding to American taxpayers’ burden.”
