| NEW YORK
NEW YORK Oct 17 The Securities and Exchange
Commission is leaning more heavily on partner regulator the
Financial Industry Regulatory Authority to monitor brokerages as
it devotes extra staff to oversee the rapid growth of
independent financial advisers, a top regulator said Monday.
The move crimps the number of SEC examiners monitoring
brokerages, and to make sure FINRA is picking up the slack, the
commission formed a group that assesses the Wall Street
regulator's efforts at monitoring the sector, said Marc Wyatt,
the head of the SEC's Office of Compliance Inspections and
Examinations at a speech in Washington, D.C.
"(The office) is working to enhance our oversight of FINRA
because we will be somewhat more dependent on them for
broker-dealer exams in the first instance," Wyatt said, speaking
to the National Society of Compliance Professionals.
Starting this month, an additional 20 percent of SEC staff
are tasked with examining investment advisers, a group that has
increased by 2,000 in 2 years.
The group that will assess FINRA's actions is called the
FINRA and Securities Industry Oversight group, and will be
staffed by about 45 people in offices in Washington, New York,
Los Angeles, Chicago and Atlanta.
Wyatt told the crowd the SEC is "not forgetting" about the
broker-dealer population, and is keeping regulators focused on
this group in New York and Chicago.
But as the only regulator with jurisdiction over registered
investment advisers, Wyatt said they needed to focus more
examiners on the "key population."
In recent years as many brokerages were bought by banks, new
business models offering greater independence and the ability to
sell a greater variety of investment products have grown in
popularity among financial advisers.
The SEC has been criticized for only examining 10 percent of
registered investment advisers each year.
(Reporting By Elizabeth Dilts; Editing by Andrew Hay)