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SIFMA Launch: Group Seeks Greater Clout in Washington, Single Regulatory Framework

BOCA RATON, FLA. – Purveyors of stocks and bonds officially joined forces this week to form one of the most powerful lobbying groups on Capitol Hill. The former Securities Industry Association (SIA) kicked off its newly consummated marriage to the Bond Market Association (BMA) today in Boca Raton, Fla. under the new moniker Securities Industry and Financial Markets Association (SIFMA). Rock band The Who could be heard blaring from the speakers during this morning’s opening remarks, where SIFMA unveiled its new logo and set forth its agenda. The ballad, of course, was the British band’s smash hit “Who Are You?” a fitting introduction for the newly formed – and oddly named – trade association.

While jokes about the awkward acronym filled the air at the cocktail hour the night before, the keynote address was all about getting down to business. Australian-born James Gorman, president and COO of Morgan Stanley’s retail brokerage arm and SIFMA’s co-chairman, told attendees that the merger would enable the trade group to wield more influence in Washington. “A combined organization gives us the strongest possible voice on key policy issues affecting our industry and puts the securities industry at the forefront on Capitol Hill,” Gorman said. In coming together, the two lobbying groups now have a membership of 650 firms, including 22 asset managers.

Gorman quickly shifted the dialogue toward what SIFMA needs to accomplish in its first year. He stressed that member firms need to take an active role in educating investors about the importance of saving for their twilight years as baby boomers careen towards a largely underfunded retirement. He also emphasized the dangers posed by regulatory duplication at NASD, NYSE, SEC and the state securities regulators.

“We need one set of rules that are clearly understood, one self regulator to administer the rules firmly and fairly, one examination process and one set of interpretations so that firms are not unnecessarily burdened with the cost of duplicative regulation – the kind of regulation that drives business away from our capital markets,” Gorman said. (Talks about a proposed merger between NASD and the regulatory arm of the New York Stock Exchange began a year ago but no plans have been laid.)

When asked if midterm election Democratic victory in both the House of Representatives and the Senate would have a negative effect on SIFMA’s plans, SIFMA co-CEO Marc Lackritz said no. “We’re not a partisan organization. Our agenda does not shift with the political winds,” he said in a press briefing later in the day. However, he did concede that their “tactics might change” with Democratic control of both houses of Congress.

Gorman highlighted the opportunity that SIFMA member firms and their armies of financial advisors have to provide philanthropic advice to the nation’s wealthy investors. “If the world’s greatest living investor (Warren Buffett) finds it advantageous to seek outside help in giving away a fortune I think that speaks to a significantly unmet need among advisors,” he said.

Gorman also noted that the industry continues to make strides toward hiring a more diverse work force but that more needs to be done at individual firms to promote diversity and ensure that jobs are open to the best talent regardless of gender, race, nationality or sexual orientation. “We have a lot more progress to make in this regard,” he said.

Although the merger should give SIFMA a lot more clout with regulators and legislators, it now represents a wider diversity of interests, which may make it difficult for the organization to establish a single voice. “Given our more diverse interests, building consensus will be a lot more difficult,” said Micah Green, co-CEO of SIFMA during a discussion of the transition.

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