Thursday, October 8, 2009


Last week, the House Financial Services Committee introduced the expansive Investor Protection Act of 2009. A copy of the bill can be found at Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, released discussion drafts of three pieces of legislation aimed at reforming the regulatory structure of the U.S. financial services industry. The draft bills include the Investor Protection Act, the Private Fund Investment Advisers Registration Act, and the Federal Insurance Office Act. These drafts contain many of the items that have been a part of the discussions surrounding regulatory reform. The Investor Protection Act proposes “to provide the Securities and Exchange Commission with additional authority to protect investors from violations of the securities laws and other purposes.” The Bill includes, among other things, establishing a fiduciary duty for broker-dealers and granting additional enforcement authority and remedies to the SEC by allowing the SEC to restrict mandatory arbitration.

On October 6th, the full committee held a hearing on capital markets regulatory reform and heard testimony from the President of NASAA, Denny Crawford (Texas Commissioner of Securities) and Richard Ketchum (CEO of FINRA), among others. Much discussion is taking place on the delineation of regulatory powers. States continue to be aggressive in advocating their assumed role in the regulatory enforcement community as the “cops on the beat.”

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