October 22, 1992
TO: BOARD OF GOVERNORS NO. 77-92
SEC RULES MEMBERS NO. 49-92
INVESTMENT ADVISER MEMBERS NO. 55-92
INVESTMENT ADVISER ASSOCIATE MEMBERS NO. 43-92
RE: CONGRESS FAILS TO APPROVE INVESTMENT ADVISER LEGISLATION
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Congress failed to approve investment adviser legislation
before adjourning this session due to significant differences
between the House and Senate versions of bills that could not be
resolved. As we previously informed you, the Senate and the
House had approved different versions of investment adviser
legislation, which was designed to improve the SEC’s oversight of
the investment adviser industry through the payment of annual
fees by registered advisers. (See Memoranda to Board of
Governors Nos. 57-92 and 71-92, SEC Rules Members Nos. 36-92 and
41-92, Investment Adviser Members Nos. 39-92 and 44-92, and
Investment Adviser Associate Members Nos. 31-92 and 36-92, dated
August 13, 1992 and September 23, 1992, respectively).
Specifically, the House bill differed from the Senate bill
in several significant respects in that it would have, among
other things, (1) imposed an express suitability standard under
the Advisers Act and (2) required registered advisers to provide
prescribed brochure disclosure and issue transaction and periodic
reports to clients.
Members of Congress have indicated that they intend to
reintroduce investment adviser legislation next session. It is
likely that such legislation would again include those provisions
as well as other controversial provisions, such as an express
private right of action under the Adviser Act. The Institute
will continue to seek targeted legislation that focuses primarily
on increasing the SEC’s resources to improve its oversight of the
investment adviser industry.
We will keep you informed of developments in this matter.
Matthew P. Fink
President