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Proposed SEC exam fee gets support from investment advisers

It's not often that you hear those in the investment advising industry calling on Congress to pass legislation that would cost them money. But it's happening with one measure.

A coalition of groups assembled from the ranks of the investment adviser community and state regulatory agencies has sent a letter to lawmakers in Washington urging them to pass what's called the Investment Adviser Examination Improvement Act of 2013.

Among provisions in the measure is one that would allow the Securities and Exchange Commission to charge an annual user fee for the exams that advisers are required to take for certification. Concern about lagging investment adviser management has been riding high in the wake of Bernard Madoff's acknowledgments about financial fraud that funneled billions of dollars of clients' money into his pockets.

The group that sent the letter to Congress last week is made up of an array of organizations that includes the Consumer Federation of America, the North American Securities Administrators Association and several financial planning and adviser groups. They say the user fee for exams is "the best option to increase investor protection."

They go on to call it an effective and common sense approach to addressing concerns expressed by the SEC that it is running short on the resources needed to properly enforce laws that cover the 11,000 federally investment adviser under its watch.

The measure, introduced by Rep. Maxine Waters, D-Calif., and Rep. John Delaney, D-Md., would allow the SEC to adjust fees according to the size of an adviser firm, the size of its asset management portfolio and its risk profile.

Whether the bill has any support on the other side of the aisle is unclear.

Source: Reuters, "Groups urge Congress to let SEC charge fees for adviser exams," Compliance Complete, Dec. 13, 2013

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