NASAA Releases Statement on SRO Bill

May 04, 2012

Reading time : 2 minutes

Jack Herstein, the president of the North American Securities Administrators Association (“NASAA”) and Assistant Director of the Nebraska Department of Banking and Finance’s Bureau of Securities, has released a statement regarding the Investment Adviser Oversight Act of 2012, recently introduced by Rep. Spencer Bachus, the Chairman of the U.S. House Financial Services Committee.

As we discussed earlier, the proposed bill would amend the Investment Advisers Act of 1940 (“Advisers Act”) to create the “National Investment Adviser Associations” (“NIAAs”), which would be overseen by the U.S. Securities and Exchange Commission (“SEC”).  Investment advisers that are currently registered with the SEC or a state securities regulator would be required to join NIAA.  However, state registered advisers would still be examined by their state securities regulator if the state regulator regularly examines investment advisers.

Jack Herstein’s statement was critical of the bill because it would require state registered advisers to join the SRO regardless of the level of oversight currently provided by their state regulator.  According to Herstein, “[t]here has never been any evidence to suggest that states have failed in their mission of regulating smaller investment advisers.”  He also calls the bill “an astonishing attack on our system of federalism with no demonstrated justification.”

To view the complete statement, click here.

Posted by Bryan Hill
Labels: NASAA, SEC Inspection, SRO