FINRA Pulls Back on Regulating Registered Investment Advisers

According to Financial Industry Regulatory Authority Chief Executive and Chairman Richard Ketchum, the SRO is pulling back from its bid to regulate Regulating Registered Investment Advisers. This move comes after FINRA spent the last couple of years lobbing to become the main regulator for RIAs.

However, according to Ketchum, in the wake of the current political climate and changes in leadership during the 2012 election, he does not expect that the House of Representative Financial Services Committee will try to revamp the way RIAs are currently regulated, which is via the Securities and Exchange Commission. For advisers that did not want FINRA overseeing them, this is good news.

However, not all of those that were against the SRO taking over RIA regulation are convinced that FINRA has completely given up. Some are worried that the regulator intends to return to the issue at a later date.

For example Investment Adviser Association executive editor David Tittsworth doesn’t believe Ketchum’s remarks are confirmation that FINRA has truly given up. He thinks that seeing as Congress may have other priorities at the moment, the SRO is choosing to focus on other issues for the time being. There are also those that believe that FINRA’s pullback is good for investors. Some have questioned whether the SRO would be able to meet the current standard set by the SEC.

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Advisors Cheer as FINRA Drops Bid to Regulate RIAs, Financial Planning Staff, February 7, 2013

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