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The SEC previously released a staff study on enhancing investment adviser examinations required by Section 914 of the Dodd-Frank Act.  The staff noted the SEC faces significant capacity challenges in examining registered investment advisers.  Some of the recommendations of the staff were that Congress should consider:

  • Authorizing one or more self regulatory organizations, or SROs, to examine, subject to SEC oversight, all SEC-registered investment advisers; or
  • Authorizing FINRA to examine dual registrants for compliance with the Investment Advisers Act.

As a result, on September 13, 2011, the House Committee on Financial Services will hold a hearing to consider proposals to improve investment adviser oversight.  As part of that hearing it will consider a draft bill titled the Investment Oversight Act of 2011.  The bill would require investment advisers to be a member of a registered national investment adviser association.  The bill however would exempt most advisors to hedge funds, private equity funds and venture capital funds from such registration.

Check frequently for updates on the Dodd-Frank Act and other important securities law matters.


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