FINRA Wants SRO for RIAs
In a letter to the SEC, FINRA Chairman and CEO Richard Ketchum advocated for the creation of a FINRA-like Self-Regulatory Organization for registered investment advisers. In the letter, Mr. Ketchum argues that an SRO would solve the SEC’s intractable examination resource problem because it would be self-funded by member firms. Mr. Ketchum notes that 55% of broker-dealers are examined each year while only 9% of advisers are examined. He asserts that an SRO would “raise the standard of conduct in the industry by imposing ethical requirements beyond those that the law can establish.” He also indicates that an SRO would regulate enforcement activity, registration and licensing of personnel, and advertising.