On April 19, 2013, Rep. Maxine Waters introduced legislation that would allow the SEC to charge user fees to investment advisors to fund their oversight. Ms. Waters said that the SEC needs a source of revenue dedicated to regulating advisors and the bill would authorize fees to fund investment advisor examinations.
Under the bill, the user fees would be set by the SEC based on the cost and frequency of inspections, an advisor’s size, advisor’s AUM, types of clients, and risk characteristics.
Ms. Waters said, “This legislation answers a funding gap which has been largely responsible for the infrequency of investment advisor exams, and represents the simplest and most direct method for achieving the desired result: improved quality and quantity of these exams and another step toward restoration of public confidence in the markets.”
The bill faces an uphill climb in Congress though. It will be difficult for Ms. Waters, who introduced the bill with Rep. John Delaney, D-Md., to generate Republican support in the House.
Jason Doss is the owner of The Doss Firm, LLC, an Atlanta-based law firm devoted to representing consumers across the country in a variety of areas including investment disputes and consumer class action litigation. Mr. Doss earned his J.D. from Florida State University in 2002 and his B.A. from the University of Florida in 1997.