New Jersey regulators are eager to expand oversight but fear the practical limitations of budget cuts. NASAA anticipates an additional 100 advisors would shift to New Jersey's watch.
The state's Bureau of Securities generates income from enforcement penalties and fines, which can vary each year, says bureau chief Marc Minor. It typically conducts exams that arise from complaints but wants to ramp up routine exams to help keep advisors in line.
States that rely on self-funding, such as Colorado and Illinois, say resources aren't an issue. But regulators whose budgets depend, entirely or in part, on state appropriations could feel the pinch.
Pennsylvania's estimated $3 billion budget shortfall could affect its securities commission, which is funded through both state revenues and the fines it collects. The commission would oversee about 140 more advisors under the plan, according to NASAA. The commission would "love to hire people" but has lost nine positions in recent years, says Lewis Levin, Pennsylvania's director of enforcement, litigation and compliance.
Some states that rely on their legislature for funding aren't overly worried. Ronald Thomas, securities division director of Virginia's State Corporation Commission, doesn't anticipate problems with hiring two additional examiners to police about 120 more advisors.
A spokesman for Texas regulators says they're eligible for an extra $934,000 each year of the state's current two-year budget cycle if the agency's board determines the funds are necessary.
In New York, regulators would oversee about 350 additional advisors and say they are still monitoring the situation. Under a New York state law called the Martin Act, the state already has jurisdiction to go after larger firms in the instance of fraud, says a spokesman for New York State Attorney General Andrew Cuomo, whose office regulates investment advisors.
Copyright © 2010 Dow Jones & Company Inc.
IRS To Regulate All Tax Preparers
The Internal Revenue Service in January recommended new requirements aimed at regulating unlicensed tax-return preparers, defined as anyone who isn't a CPA, an attorney or an enrolled agent (who are federally authorized tax practitioners).
Under the IRS proposal, CFPs without such credentials would be required to register with the IRS as a preparer and pass a competency exam.
The IRS says the initiative aims to reduce misconduct and help consumers receive better service. The proposals would require anyone signing a federal tax return as a paid preparer to register with the IRS, pay an as-of-yet-unannounced user fee good for three years and have a preparer tax identification number, or PTIN. The registration would start September 1, 2010, and the agency hopes to have final regulations in place for next year's filing season. There is no grandfathering, and preparers who already have a PTIN must register as well. When they do, their current numbers will be reissued to them.