House Financial Services Chair Jeb Hensarling issued a proposed re-do of the six-year-old Dodd-Frank Act Tuesday that gives and takes away from investment advisors and retail investors.

With the temperatures of U.S. House, Senate and presidential campaigns rising and the number of days Congress is in session dwindling, the chances that any of the proposals will make it into law are virtually non-existent. But if Republicans maintain control of the House or the Senate, the plan could be a starting point for legislation next year.  

For advisors, the Hensarling proposals give them the right to remove enforcement proceedings from Securities and Exchange Commission administrative law judges and place them in the hands of the federal courts.

It also gives them a potential break from some new SEC rules because the agency and all other federal financial regulators would have to conduct detailed cost-benefit analyses for all proposed regulations.

In another "give" (which would also be a “give” to consumers who would end up winners rather than losers with new places to put their money), the legislation would expand the pool of accredited investors, which in turn would expand the number of clients to which advisors could offer private funds.

In a take-away for advisors (which would be a give to retail investors), the maximum criminal fines would be increased for individuals and firms for insider trading and other corrupt practices.

For the first time, the SEC would be allowed to impose fines equal to investor losses.

But this expanded ability to protect consumers would be limited to cases involving fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement where the loss or risk of loss is significant.