Does Regulatory Jurisdiction Affect the Quality of Investment-Adviser Regulation?

• 成果类型: Article
• 署名作者: Charoenwong, Ben; Kwan, Alan; Umar, Tarik
• 署名单位: National University of Singapore; University of Hong Kong; Rice University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20180412
• 发表日期: 2019
• 页码: 3681-3712
• 关键词: FINANCIAL ADVICE; BROKERS; HOME; constraints; misconduct; MARKETS; FRAUD; ACT

摘要

The Dodd-Frank Act shifted regulatory jurisdiction over midsize investment advisers from the SEC to state-securities regulators. Client complaints against midsize advisers increased relative to those continuing under SEC oversight by 30 to 40 percent of the unconditional probability. Complaints increasingly cited fiduciary violations and rose more where state regulators had fewer resources. Advisers responding more to weaker oversight had past complaints, were located farther from regulators, faced less competition, had more conflicts of interest, and served primarily less-sophisticated clients. Our results inform optimal regulatory design in markets with informational asymmetries and search frictions.