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Finra’s Lobbying Slipped to a Four-Year Low in 2016

March 22, 2017

Finra’s spending on lobbying the government has fallen to its lowest level in four years, InvestmentNews writes.

The brokerage industry’s self-regulator spent $670,000 on lobbying in 2016, according to reports filed with the Office of the House Clerk cited by the publication. Its lobbying bill has been falling steadily since 2012, when it spent $960,000. But the drop from 2015 was particularly steep. That year, Finra’s lobbying bill was $820,000, InvestmentNews writes.

The reasons for reduced spending are unclear, according to the publication.

Finra isn’t giving away what its priorities were in 2016, for example. The disclosure about lobbying that it filed for the year uses the same rubber-stamp phrase about regulation of broker-dealers and the securities industry and investor protection that it’s used since 2013, according to InvestmentNews.

But the newspaper suggests the high numbers in 2012 may have been due to Finra’s attempt that year to push through legislation setting up a self-regulatory organization for RIAs. The bill never made it out of the House Financial Services Committee, according to the publication.

Nonetheless, a recent hire in its government affairs department suggests the regulator wants lawmakers to hear its voice, according to the publication. At the end of January, Finra hired Gregory Dean, former chief counsel to Banking, Health, Education, Labor and Pensions and Budget committees in the Senate, InvestmentNews writes. Before joining Finra, Dean served as senior director in the Royal Bank of Canada’s government affairs arm, according to the publication. The new hire may help Finra deal with increased attention from lawmakers.

Last year, Sen. Elizabeth Warren, D-Mass., and Sen. Tom Cotton, R-Ark., asked Finra’s CEO at the time to demonstrate how it’s dealing with brokers with a history of misconduct and the firms that hire them, InvestmentNews writes. And Democrats on the Senate Banking Committee said last week they’re considering legislation to require Finra to set up a fund to pay out arbitration claims against brokerages going bankrupt, according to the publication.

By Alex Padalka
  • To read the InvestmentNews article cited in this story, click here.