Funds & Advisers
Dec. 11, 2009 -- The House of Representatives passed the Wall Street Reform and Consumer Protection Act of 2009 on December 11, 2009. The bill, which represents the most sweeping changes to financial regulations in 70 years, contains the following securities-related provisions:
- Creates the Consumer Protection Financial Protection Agency to protect against unfair and abusive financial products and services.
- Establishes a process to identify and regulate “too big to fail” financial firms.
- Enhances the SEC by bolstering enforcement powers and allowing the SEC to charge “fair and reasonable” fees to advisers.
- Regulates the $600 trillion over-the-counter derivatives market.
- Directs the SEC to adopt rules requiring broker-dealers who provide personalized investment advice to adhere to a fiduciary duty.
- Requires registration of private equity and hedge fund managers.
- Increases the threshold for SEC registration from $25 million to $100 million.
- Directs the SEC to adopt a rule prohibiting advisers from having custody of client assets valued over $10 million.
The Senate’s reform bill, on the other hand, has yet to come to a full vote. Once the Senate passes its reform legislation, the two bills will have to be merged, and many Congressional observers expect this process to last well into 2010.