August 17, 1990
TO: INVESTMENT ADVISER MEMBERS NO. 42-90
INVESTMENT ADVISER ASSOCIATE MEMBERS NO. 37-90
RE: INSTITUTE STATEMENT ON FINANCIAL PLANNER LEGISLATION
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On March 30, 1990, Representative Boucher introduced
legislation entitled the "Investment Advisors Disclosure and
Enforcement Act of 1990." Hearings were recently held on the
bill before the Subcommittee on Telecommunications and Finance of
the House Committee on Energy and Commerce. The Institute
supported the objectives of the legislation to insure investor
protection. However, we had concerns about certain provisions of
the bill. Attached is a copy of the Institute's written
statement on the bill.
With respect to the scope of the bill, the Institute
recommended that investment advisers to investment companies and
institutional clients be exempt from the bill. We also
recommended that banks engaging in certain advisory activities be
covered under the bill and that the blanket exclusion under the
Investment Advisers Act for banks be repealed.
The Institute noted in its statement that it may not be
necessary to add a private right of action under the Advisers
Act, as proposed by the bill. In almost all cases, a defrauded
investor will have other available remedies under both federal
and state law.
The Institute objected to the proposed disclosure
requirements in the bill. We believe that it is more appropriate
for the SEC to promulgate disclosure requirements through its
rulemaking authority rather than for Congress to mandate specific
disclosure requirements in legislation.
We will keep you informed of developments.
Amy B. Rosenblum
Assistant General Counsel
Attachment