Corporate & Securities Law

By Jim Hamilton

A bill introduced Wednesday, July 8 by Barney Frank, Chair of the House Financial Services Committee, to provide the SEC with federal jurisdiction over the 14,000 investment advisory firms regulated solely by the states is causing concern among those investment advisers, state securities regulators and the Consumer Federation of America in Washington D.C. A principle concern is that because the investment advisers with less than $25 million in assets are already regulated at the state level, the added layer of federal regulation they'd be subject to would be unbearable for them to adhere to especially since the text of the bill, as drafted, seems to conflict with the states' laws and rules for investment advisers. William Gavin, Secretary of the Commonwealth of Massachusetts, particularly expressed concern over the text, stating that federal oversight could preempt the states from regulating state-registered investment advisers that the NSMIA Act of 1996 gave them exclusive authority over. But Barbara Roper, Director of Consumer Affairs for the Consumer Federation of America, believes the text to be a drafting oversight that will be removed by legislators.

Hearings begin this week on the bill, entitled the "Consumer Financial Protection Agency Act of 2009" and written at the request of the White House, with the intent to pass it by the end of July.

Atrributed to "InvestmentNews."

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Full post as published by Jim Hamilton's World of Securities Regulation on July 13, 2009 (boomark / email).