Wall Street Reform And Consumer Protection Act Of 2009
Floor Speech
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Mr. COHEN. I yield myself as much time as I may consume.
I want to thank Chairman Frank for working with me to include this language in the Wall Street Reform and Consumer Protection Act of 2009.
This amendment would strip a provision permitting the Securities and Exchange Commission to delegate regulation of investment advisers to the Financial Industry Regulatory Authority.
In its present form, the bill would give FINRA sweeping rule-making authority over investment advisers which has been under the sole domain of the governmental regulatory agencies. This far-reaching provision would extend FINRA's jurisdiction to Federally registered investment advisory firms that manage almost 80 percent of all advisory firms' assets under management.
FINRA does not have the necessary expertise or experience with investment advisers or the Investment Advisers Act to do the job, and the SEC is best positioned to oversee the investment advisers under the Investment Advisers Act.
There is inherent conflict of interest in having a self-regulatory group that funds this agency and has always been on the side of broker dealers. We cannot afford to outsource key regulating functions to self-regulating organizations that act solely in the best interest of their clients.
In a speech earlier this year, SEC Commissioner Luis Aguilar noted his opposition to establishing a self-regulatory organization for investment advisers because the ``SEC should not outsource its mission'' and because the SEC ``is the only securities regulator with the necessary experience in dealing with a principles-based regime.''
I'm concerned that the high level of investor protection provided under the Advisers Act fiduciary duty would be diminished if FINRA were to obtain the additional authority. We should not expend the authority of FINRA to the investment advisory profession.
Again, I urge the passage of this amendment which would keep the SEC as the proper, independent regulator of investment advisers.
I reserve the balance of my time.
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