A Compilation of Enforcement and Non-Enforcement Actions - December 2010

Non Enforcement Matters

Is an SRO in the Cards for Investment Advisers?

Section 914 of the Dodd-Frank Wall Street Reform and Consumer Protection Act directs the SEC to review whether Congress should create a self-regulatory organization (SRO) to regulate investment advisers. Dodd-Frank also requires those SEC investment advisers with less than $100 million of assets under management to deregister with the SEC and register at the state level while the SEC will continue to register those investment advisers with at least $100 million of assets under management.

The SRO, if approved by Congress, would be created under the authority of the SEC to register, examine, and create rules for investment advisers. The Financial Industry Regulatory Authority (FINRA), the primary SRO for registered broker-dealers, has made it known that an SRO should be created for the purpose of regulating investment advisers and that FINRA should be that SRO. However, the North American