In a recently added amendment to the Investor Protection Act (IPA) of 2009, the Securities and Exchange Commission (SEC) would have the power to allow the Financial Industry Regulatory Authority (FINRA) to carry out oversight on investment advisers working at broker-dealer firms.
Though some agree with this move while others oppose, it came as a shock to both sides that the amendment was added so easily to the language of the bill. If the IPA passes in its current iteration, FINRA would in essence have the power to oversee any adviser associated with a registered broker-dealer. That power, if exercised, would include a major percentage of the investment advisory business.
The amendment was submitted by Republican Representative Spencer Bachus, R-Alabama. The entire bill, which also includes a single fiduciary standard for registered investment advisers and independent broker-dealers, is one part of a move by Congress to reform the financial industry. The complete bill is expected to be approved for full House consideration by Wednesday.
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