Ever since Dodd-Frank, there has been much concern in the RIA world regarding who would be its regulator.  At this point, RIAs can dispense with any concern that FINRA will be its regulator because FINRA pulled its hat out of the oversight ring, at least for now.

Even thought FINRA spent nearly $2 million lobbying Congress to become the SRO for RIAs, FINRA has decided that there is not enough support in Washington for it to be the regulator for RIAs.  So where does this leave RIAs?

At the moment, it seems unlikely that there will be a new SRO for RIAs any time soon.  Instead, the most likely scenario would be greater funding for the SEC to conduct more examinations than historically performed.

Although RIAs may not have their own SRO, they will still likely have to contend with a better funded SEC.  You should anticipate and be prepared for more frequent examinations.  All bets may be off, however, if FINRA pushes once again to be the SRO for RIAs.

* photo by freedigitalphotos.net