SEC Staff Delivers Study on Adviser Examinations
The staff of the Division of Investment Management
released its much-anticipated study (required by Dodd-Frank) concerning
investment adviser examinations. In the
study, the staff admits that it will not have sufficient resources to
sufficiently examine the ever-growing number of registered investment
advisers. The staff requests Congress to
consider three alternatives: (1) allow self-funding by authorizing the SEC to
impose user fees on RIAs; (2) authorize one or more SROS; or (3) authorize
FINRA to examine dual registrants. The
SEC argues that imposing user fees is the best of the three alternatives.
OUR TAKE: Perhaps most significant is the SEC officially
endorsing the use of an SRO or FINRA to assist the examination process. Although the SEC posits the three options as
alternatives, Congress may not see them as mutually exclusive.