Eleven brokerage firms launched a new trade group on Wednesday designed to address issues affecting Main Street investment shops and securities dealers.
The American Securities Association will act as the umbrella organization for the long-standing Bond Dealers of America (BDA) and the newly formed Equity Dealers of America (EDA). The pre-existing BDA organization, which was formed eight years ago, will continue to represent fixed-income firms’ interests, while the new EDA group will serve as an advocacy voice for middle-market financial services firms.
The founding EDA members include some of the largest firms in the industry such as Raymond James Financial, as well as several regional broker/dealers, including Robert W. Baird & Co., Stephens Inc., Stifel Nicolaus & Company, William Blair & Company, and Wunderlich Securities.
The EDA was formed as a response to regulatory trends occurring in the marketplace, says Chris Iacovella, CEO of the EDA. “Regulation is coming down from different levels and different places in Washington and the regulation is not differentiating between the size or the business models or the unique perspective of different financial services organizations,” Iacovella says, noting this “one-size-fits-all regulation” is unfairly affecting smaller firms that do not sit on Wall Street.
“The business models are different, the size of the entities are different, and that needs to be taken into consideration as policymakers and regulators make decisions,” Iacovella says. He added that the EDA plans to work with other existing organizations such as the Securities Industry and Financial Markets Association, when it makes sense.
Membership in the organization is open generally for institutions that are involved in at least one of the following areas: financial planning, wealth management, banking, equity research, corporate access or sales of securities.
The EDA has a robust slate of topics its members hope to address over the next year, including broker disclosure of recruitment compensation, predatory high-frequency trading and the implementation of the JOBS Act rules, as well as unit investment trusts and mutual fund breakpoint disclosures.
“Many of these are common-sense issues, and pretty straightforward. And a lot of them are non-partisan issues that can be presented in a way where they’re smart for investor protection and assist in fairer, efficient and more balanced capital markets,” Iacovella says.