Compliance costs reached an estimated annual total of more than $25 billion in 2005, up from $13 billion in 2002 according to the survey. The SIA says the estimated increase in spending during this period is equivalent to almost five per cent of the industry's annual net revenue.

The overwhelming bulk of total compliance costs - 93% - were staffing-related as securities firms reported receiving an average of 231 inquires per firm over the last 12 months, nearly one for each business day. Requests from the Securities and Exchange Commission and National Association of Securities Dealers made up nearly 75% of the total.

But the SIA says most of the compliance costs incurred by firms were avoidable and could have been eliminated by combining regulators and making processes more efficient. The study revealed that restructuring parts of the Nyse and NASD to reduce regulatory duplication could result in significant cost savings.

"Having two regulators is like having to fill out two sets of federal tax returns from two different countries, each with its own rules and requirements and each needing different tax advisors, " says SIA president Marc Lackrtiz. "Our firms need one rulebook, one set of procedures, one set of examinations."

The SIA says survey participants called for the "consolidation of, or at least better coordination by, regulators ito remove unnecessary duplication of effort annd ensure that rules and regulations are more consistent".

Other recommendations include "clearer guidancce, in plain English, to avoid unnecessary and wasteful guesswork" and a reduction in the pace and volumes of regulations "which are now putting enorrmous pressure on industry firms to keeep pace".

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