"The marketplace always drives Washington," said Duane Thompson, managing director of the Financial Planning Association's Washington office.
The development of the Internet over the past decade has led to reforms, he said.
"What that did was cause a chain of events, starting with putting huge pressure on commission margins and forcing it down to nearly zero," Mr. Thompson said.
That, in turn, led to the Securities and Exchange Commission's attempts, starting in 1999, to help brokers change from a commission-based system for selling securities to allowing them to charge fees based on assets, as financial advisers traditionally have done.
The Denver-based FPA opposed exempting brokers who charge asset-based fees from being regulated as investment advisers. After battling with the SEC for years, the FPA finally won a lawsuit overturning the SEC's rule in 2007.
"That has kept the debate going these 10 years over regulation of financial advice," Mr. Thompson said.
"There's been a complete regulatory revolution in the last 10 years," said David Tittsworth, executive director and executive vice president of the Investment Adviser Association, a Washington organization that represents SEC-registered investment advisory firms.
"Ten years ago, there was just one written policy that advisers had to prepare. That was [on] insider trading," he said.
"Now, today, it's insider trading, privacy, proxy voting, codes of ethics, best execution, business continuity, electronic filing of Form ADV, and the biggest one of all, the compliance program rule that requires you to have written policies and procedures for everything [else]."
Repeal of Depression-era prohibitions against consolidated financial services businesses in the Gramm-Leach-Bliley Act of 1999 also had a huge effect on the industry.
"On the macro level, by repealing [the Glass-Steagall Act of 1933, which prevented banks, securities firms and insurance companies from engaging in each other's businesses] you really had an opening up of competition," said Ira Hammerman, senior managing director and general counsel of the Securities Industry and Financial Markets Association of New York and Washington.
"Over the last 10 years, we've seen commercial banks getting more active in investment-banking and brokerage activities, and broker-dealers opening banks," he said.
The law stipulates that no matter what a company's business is, its activities are regulated by function, Mr. Hammerman said. The requirement has helped keep regulations uniform as companies enter new lines of business, he said.
It is still early to assess the effect of the collapse of The Bear Stearns Cos. Inc. of New York on the SEC's oversight of investment banks.
But SEC Chairman Christopher Cox recently testified before Congress that the commission soon will propose additional rules "building on the lessons learned from the subprime-market turmoil." Proposals could include requiring better disclosure of past credit ratings so comparisons could be made for accuracy, among other things, he said.
Enactment of the Pension Protection Act of 2006 is one of the most important developments of the decade, said Paul Schott Stevens, president and chief executive of the Investment Company Institute in Washington. The law made it clear "that participant-directed defined contribution plans would be the way of the future," he said.
That is particularly important for the mutual fund industry because "mutual funds are almost an ideal investment offering in that context," Mr. Stevens said. The Pension Protection Act's impact on the nation's pension system also has been important for the growth of 401(k)-type plans, he said.
The mutual fund industry and investment advisers experienced changes as the SEC moved over the last decade to implement the National Securities Markets Improvements Act of 1996, which divided regulation of investment advisers between the commission and the states, and pre-empted states from approving securities offerings such as mutual funds, giving the SEC exclusive jurisdiction, Mr. Stevens said.
The Sarbanes-Oxley Act of 2002 originally was enacted in response to major accounting scandals that brought down a string of the country's largest companies, starting with Houston-based Enron Corp. in 2001.
But the law ended up affecting the mutual fund industry, as well, when the SEC subjected mutual funds to certification requirements similar to what operating companies came under as a result of the law.
The fund industry's own trading scandal, which erupted in 2003, brought with it a whole new host of SEC regulations, Mr. Stevens noted, including rules allowing funds to charge redemption fees for sales of fund shares soon after their purchase.
One of the most sweeping reforms would have required funds to have independent chairmen. That requirement was invalidated when the U.S. Court of Appeals for the District of Columbia Circuit ruled in 2006 that the SEC violated the Administrative Procedures Act when the rule was issued.
The SEC didn't reissue the rule, but many fund companies have adopted independent chairmen anyway.
"It's been an extraordinary period of regulatory activity in the last decade," Mr. Stevens said.
E-mail Sara Hansard at firstname.lastname@example.org.