FINRA Exec Says Adviser SRO Opponents Hurt Industry
In a recent speech, Thomas Selman, FINRA’s EVP of Regulatory Policy, accused opponents of an investment adviser SRO of concluding that the “financial services industry has no interest in regulation” and eroding public trust in the industry. Seeking to defend the concept of an investment adviser SRO (presumably under FINRA’s jurisdiction), Mr. Selman attempted to refute SRO opponents’ two primary objections: (1) an SRO would be captive to the industry and (2) an SRO would be insensitive to investment adviser concerns.
OUR TAKE: Opponents of an SRO have not opposed regulation. They simply prefer the SEC over FINRA. The SEC has a long (since 1940) and generally successful history regulating investment advisers. SEC advocates have argued for increasing SEC funding either through budget allocations or through user fees. They generally object to an SRO because it would cost far more to create an entirely new SRO than properly funding the SEC.
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