New Bill Will Propose FINRA As Industry SRO

Monday, April 16, 2012 09:16
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New Bill Will Propose FINRA As Industry SRO

Tags: compliance | FINRA | regulation

A Republican bill that would make FINRA the regulatory body for investment advisors may soon come on the floor. Republican Spencer Bachus is drafting the legislation and is expected to introduce it to Congress next week. Objections are strong to FINRA becoming a self-regulatory body for the financial industry. Those opposed to FINRA having such a strong position say that the organization is more closely tied to a suitability frame of reference rather than a fiduciary one.

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Suitability is the standard for brokers at large financial institutions; investment advisors are held to a more strict fiduciary standard. Michael Oxley, of Sarbanes-Oxley fame, supports the move and is seen as instrumental in achieving it.

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