AICPA Urges Congress to Keep Investment Adviser Oversight with SEC

April 26, 2012

Washington (April 26, 2012)The American Institute of CPAs (AICPA) today expressed its opposition to  the Investment Adviser Oversight Act of 2012, which was introduced in the House of Representatives on April 25, and urged Congress to keep oversight of investment advisers with the Securities and Exchange Commission (SEC).  The following statement can be attributed to AICPA CEO Barry Melancon, CPA, CGMA.


“The AICPA is the world’s largest association representing the accounting profession.  Our members provide audit, tax, retirement consulting, plan administration, and financial planning services. Many of our members work for a firm that is registered as, or affiliated with, a registered investment adviser,” Melancon said. “The bill would transfer oversight of investment advisers from the SEC to a Self-Regulatory Organization (SRO). We oppose this move.


“We believe that the SEC’s core mission to protect investors requires adequate regulation of the investment advisory profession. The SEC remains the proper regulatory body to protect the public’s best interest.” Melancon continued, “Providing the SEC with resources to properly enforce their rules is the best solution for investors and the public.”


Dodd-Frank Act Section 914 directed the SEC to conduct a study to review and analyze the need for enhanced examination and enforcement resources of investment advisers. On January 19, 2011, the SEC released its staff report, which concluded that the current SEC-registered investment adviser examination program faces significant capacity and funding challenges. It recommended three options: impose “user fees” on SEC-registered investment advisers to fund oversight; authorize one or more SROs to examine investment advisers, with oversight from the SEC; or authorize FINRA to examine dual registrants for compliance with the Investment Advisers Act of 1940.


A study by The Boston Consulting Group in December found that funding an enhanced SEC examination program would likely cost half that of creating a SRO for investment advisers.  The report further found that funding a SRO would likely cost twice as much for each investment advisory firm as paying user fees to the SEC and that, given the SEC would still have to oversee the SRO, any cost savings to the SEC through creation of a SRO would be minimal.