The U.S. House this afternoon approved a financial services reform bill that would charge user fees to SEC-registered money managers to help cover the costs of their inspections and also require large hedge fund and private equity managers to register with the SEC.
Lawmakers removed a provision from the legislation that would have subjected about 4,000 money managers associated with broker-dealers to FINRA regulation.
The bill also would shift 4,200 of the about 11,000 SEC-registered money managers —those with less than $100 million under management — to state regulation.
The legislation passed 223-202. The Senate is working on its own comparable legislation. If the Senate approves its own bill, House and Senate leaders will work out the differences between their bills in conference.
Deletion of the FINRA provision was a victory for money managers, according to David Tittsworth, executive director of the Investment Adviser Association. “But the jury is still out on what the Senate will do,” he added.
The Financial Industry Regulatory Authority, meanwhile, said it was “encouraged” that the legislation had directed the SEC to study the potential need for regulation of money managers by a self-regulatory organization, according to a statement issued by FINRA spokesman Howard Schloss.