SEC's White calls third-party adviser exam idea 'creative'

Chairman says agency has the authority to implement such a rule

May 22, 2014 @ 12:01 pm

By Mark Schoeff Jr.

Securities and Exchange Commission Chairman Mary Jo White on Thursday indicated she was open to the idea of outsourcing examinations of investment advisers, calling it “creative.”

Earlier in the week, SEC Commissioner Daniel Gallagher said that the agency should propose a rule that would require advisers to hire third-party contractors to review their operations.

The move would help strengthen adviser regulation, according to Mr. Gallagher. The agency currently examines only about 9% of the roughly 11,000 registered investment advisers each year.

“His suggestion is a creative one,” Ms. White told reporters at the Investment Company Institute general membership meeting in Washington. “There are a number of issues that have to be carefully looked at, including authority issues.”

The SEC does have the ability to implement a rule establishing third-party examinations, Ms. White said. Investment advisers have expressed concerns about potential costs. Three of the five SEC commissioners have to agree to propose a new regulation.

As she has done in many of her public appearances, Ms. White emphasized that the agency has to do a better job of overseeing advisers.

“The priority for us is to increase that coverage so that we're carrying out our investor protection function, as we're assigned to do,” Ms. White said.

It's unlikely the SEC will receive its full budget request from Congress — $1.7 billion for fiscal 2014, up from its current $1.3 billion budget. Ms. White has said that a priority for the extra dollars would be to hire more investment adviser examiners.

During a Q&A session with ICI president and chief executive Paul Schott Stevens, Ms. White said that the SEC is improving its use of technology to focus its examinations on “areas of highest potential risk.”

“We're much smarter about the resources we're spending,” Ms. White said.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

What can advisers learn from the first female fighter pilot?

Pressure is pressure. Whether you are taking off from an aircraft carrier or dealing with the unforgiving movements of the market, you need to have a plan. Carey Lohrenz, the world's first female F-14 pilot, has some advice for advisers.

Latest news & opinion

10 least affordable U.S. cities for renters

Based on average salaries and rents, here are the least affordable U.S. cities for renters, according to businessstudent.com.

10 countries where your clients should consider retiring

These countries offer the greatest security for their retirees, according to the 2018 Natixis Global Retirement Index.

10 most affordable U.S. cities for renters

Here are the U.S. cities that are most affordable for renters, according to Business Student.com, which compared the cost of rent to average salaries.

9 best - new - financial adviser jokes

Scroll through for nine new financial adviser laughs.

Captrust, prominent 401(k) advice firm, ramps up its wealth management business

Captrust wants to grow annual revenue from wealth management to 50% from 30% over the next five years.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print