The Investment Adviser Oversight Act of 2012 (HR 4624) was introduced yesterday in Congress, according to FrontLine Compliance. The bill provides for the formation of a registered national investment adviser association which would serve as an advisory industry SRO.

In summary, the bill calls for the following:

• The creation of an advisory industry SRO with full rule-making and examination authority over SEC and state registered advisers

• The SRO would be registered with the SEC and report to the SEC for approval regarding its program – similar to how FINRA currently reports to the SEC

• The SRO would have authority over both registered entities and the associated persons of such entities, again like FINRA

• Exemptions for SRO registration are contained in the bill and include certain exemptions for state registered advisers that reside in states with formal examination programs that allow for state exams once every four years

• The bill strives for a balance between SEC, state, and SRO regulation of advisers

FINRA, the primary broker-dealer industry SRO, has long been a proponent of an adviser SRO and has been lobbying Congress for its formation. In opposition, the Investment Adviser Association (IAA), an industry trade group for advisers, has increased its lobbying efforts to oppose the new bill. For now, it appears that the bill may be brought to the house floor for vote as early as May 2012.