States urge Congress not to water down Dodd-Frank
* State securities watchdogs urge full SEC funding
* NASAA seeks implementation of fiduciary standard
NEW YORK, Feb 2 (Reuters) - State securities regulators on Wednesday urged Congress to preserve state and federal investor protections in last year's Dodd-Frank financial reform law.
"Dodd-Frank was born out of necessity and not out of a desire for regulation for regulation's sake," said Pennsylvania Securities Commissioner Steven Irwin, in a statement. "Congress must not repeal Dodd-Frank and rip open the regulatory gaps it seeks to close."
Irwin is the chairman of the federal legislation committee of the North American Securities Administrators Association, the organization that coordinates the consumer protection and enforcement activities of state and provinces.
Officials from states like New York and Massachusetts have been aggressive in challenging Wall Street banks. Under Dodd-Frank they will play a key role in supervising thousands of small investment advisers.
NASAA presented on Wednesday its legislative agenda for this year, including calls for "strong" implementation of Dodd-Frank, improved cooperation between state and federal agencies and imposing a fiduciary duty on all financial professionals providing investment advice.
David Massey, this year's NASAA president and North Carolina's deputy securities administrator, said the group wants to ensure "the investor protections included in the Dodd-Frank Act are not weakened or delayed by funding constraints."
NASAA's agenda calls for, among other things, that Congress at a minimum provide the U.S. Securities and Exchange Commission with $1.3 billion in fiscal 2011, the 18 percent budget increase authorized by Dodd-Frank.
Partisan wrangling in the U.S. Congress has left the SEC's funding stuck at 2010 levels.
The states also want lawmakers to reject using industry self-regulatory organizations to supervise investment advisers and instead provide funding to help state and federal regulators handle the expanded work load.
In a little over six months since Dodd-Frank was signed into law, and less than three years from the depths of the financial crisis, financial services companies and a new Republican majority in the House have began pushing to reverse some of the reforms. (Reporting by Joseph A. Giannone; Editing by Tim Dobbyn)
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