The provision that would have given FINRA the authority to inspect and regulate any investment advisor associated with a broker/dealer was successfully deleted from the huge financial services reform bill on December 11. Debate on the financial services reform bill, The Wall Street Reform and Consumer Protection Act (H.R. 4173), continues today, December 11, on the House floor, with a vote expected today as well.
Rep. Barney Frank (D-Massachusetts), chairman of the House Financial Services Committee, along with Rep. Steve Cohen (D-Tennessee) asked that the FINRA amendment–which was originally proposed by Rep. Spencer Baucus (R-Alabama)–be deleted. Baucus said during the House floor debate that he proposed the amendment post the Bernie Madoff ponzi scheme, and felt it was necessary because the SEC failed to properly exam Madoff's firm. Baucus did say, however, that he would agree to strike the Finra provision to the financial services bill at this time and explore other remedies. Frank responded that he agreed with Baucus's concerns, but was swayed by concerns expressed by the Texas Securities Administrator that the provision would delegate too much authority to FINRA.
