House Approves Bill Easing RIA Advertising
The House of Representatives has approved a bill that would let RIAs use testimonials, reduce paperwork and ease other restrictions, despite key Democrats saying it would be vetoed by President Barack Obama, Law360 reports.
The Investment Advisers Modernization Act of 2016 aims at repealing a 1961 rule banning advisors from using testimonials and past recommendations when targeting qualified investors, according to the Investment Adviser Association's website.
The bill would also do away with a requirement that advisors send clients certain “repetitive” documentation on private fund investments and exempt advisors from several custody requirements on restricted securities, among other provisions, according to the trade group.
Last month, Rep. Maxine Waters, D-Calif., who sits on the House Financial Services Committee, and Rep. Carolyn Maloney, D-N.Y., a member of the Financial Services subcommittee overseeing the SEC, said the bill would like face a veto from Obama, as reported previously.
Opponents of the bill, which include the Consumer Federation of America and Americans for Financial Reform, say the bill would gut Wall Street regulations and hurt retirement savers.
Meanwhile, Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee, has introduced a bill that includes a provision to repeal the Department of Labor’s fiduciary rule, designed to require retirement advisors to put clients’ interests first, his spokesman tells InvestmentNews. The Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act aims to replace the Dodd-Frank Act, according to a press release from the committee.
The bill would also require the SEC to perform a comprehensive cost-benefit analysis on its own version of a fiduciary rule, InvestmentNews writes.