State securities regulators are publicly worried that efforts to push RIAs into a self-regulatory organization would render their own activities irrelevant.
Steven Irwin, head of the North American Securities Administrators Association, was something of a surprise panelist in Tuesday's Congressional SRO hearing.
For one thing, he's against the creation of a self-regulatory organization for advisors or the incorporation of advisors into a FINRA framework.
As he argues, taking oversight of smaller advisors away from the states would be "a mistake."
Interestingly, Rep. Bachus, the architect of the current SRO bill, seemed extremely eager to work with the states.
"I do understand your concern and understand that state regulators are a very important part of the landscape," he conceded during the Q&A portion of the hearing.
"We do not want to ignore the state role. It's very important."
Maybe this means that only RIAs that are now regulated by the SEC are in play here.