House Financial Services Committee Chairman Spencer Bachus (R-Ala) has introduced a bill for The Investment Adviser Oversight Act of 2011 to the Congress.
The essence of the legislation would be to create a special self regulatory organization (SRO) strictly for investment advisers. Apparently, the theory is that the SEC and the state regulators don't have the resources to adequately oversee the industry.
The idea is that the investment advisers, instead of the taxpayers, will foot the bill for their own regulation and oversight.
The current draft of the bill would exclude the following from oversight by a “registered national investment adviser association”:
- Investment companies (mutual fund advisors)
- Non-U.S. persons
- Clients that in aggregate own at least $25 million in investments
- Various religious, education or charitable entities
- Stock pension plans and collective trusts
- Private equity funds
- Venture capital fund
As you can imagine the bill has produced some strong reactions from the industry. Stay tuned.
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Robert Kiggins, Esq. of McCarthy Fingar LLP, is author of the blog, and may be reached at (914) 385-1024 or rkiggins@mccarthyfingar.com.
Nothing is this blog is intended to be or may be relied upon as specific legal advice. Securities and related laws are complex and facts are different from case to case. Competent counsel should be consulted. Views expressed by the author in this article are his own and not those of any other person.
