InvestmentNews' 2013 Regulatory Roundtable in Washington, DC.
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In Washington, there's an old saying, 'if you're not at the table, you're on the menu." TD Ameritrade Institutional's Skip Schweiss on why this is now particularly true with investment advisers.
One of the things we did very early on 10
years ago when we formed FSI is said we've got
a-- we've got a bill to constructive working relationship with
our principal regulator. At that time, it was in NASD,
now FINRA. We're building on that constructive relationship now to
focus on some specific areas where we think they'll improve
in their ability to protect investors and make the regulatory
environment more effective for our members. We like to see
FNRA implement a robust and effective cost benefit analysis. The
good news there is early in 2013 they announced they
were hiring a chief economist. We've worked to cultivate a
good relationship with him as he is building out that
capability. The arbitration process needs some significant change in reform
so that it continues to be a fair forum for
investors who have complaints, but it's also a fair forum
for industry participants. Tremendous opportunity to improve their examination process,
so there's clarity of the expectations so that the rules
are the same from district to district and applied the
same way from district to district. And then finally, I
think FINRA would benefit from greater transparency in how they
govern themselves, how they spend FINRA members' money. And to
their credit, they have listened to our concerns in all
of those and have taken some, I think, constructive steps
in every one of those areas right now. We've been
working for a long time to try to get in
place a permanent fix so that our members are not
on a-- under a potential cloud of the IRS coming
in and questioning whether or not their advisers are appropriately
classified as employees or independent contractors. We believe very strongly
we have a long history and track record where they
are clearly independent contractors who meet all of the rules.
So, one of the things we've been able to do
with the last few years is move from playing defense
from opposing bills that we think don't solve the problem
or create other unintended consequences. Now, we're working on offense.
We're trying to find a way to get a permanent
fix in place. It's unlikely-- Given the current political environment,
it's unlikely that we'll see success in that in 2014,
but we're working to lay the foundation and groundwork for
success in future congresses.