SEC Releases Staff Study Recommending a Uniform Fiduciary Standard of Conduct for Broker-Dealers and Investment Advisers
SEC Press Release
The SEC submitted to Congress a study (required under § 913 of the Dodd-Frank Act) in which the staff recommends, among other things, a uniform fiduciary standard of conduct for broker-dealers and investment advisers. The study states that such a standard would be "no less stringent" than the standard currently applied to advisers under the Investment Advisers Act and would apply to financial professionals that provide "personalized investment advise about securities to retail investors." The study recommends that the SEC undertake rulemaking focused on assisting broker-dealers in complying with the requirements of the uniform fiduciary standard, in particular when engaging in principal trading.
In addition to the fiduciary standard, the study addresses a number of other questions relating to the harmonization of regulation of advisers and broker-dealers. This includes advertising, the use of finders and solicitors, supervision, licensing and registration requirements, and recordkeeping.
In a separate statement, SEC Commissioners Casey and Paredes criticized the study for failing to adequately justify a "fundamental" change in the regulatory regime for broker-dealers and investment advisers. The statement questions whether a uniform fiduciary duty would address concerns about investor confusion and says that the study does not adequately address the costs of a such a regulatory change for the industry or investors.
Please contact any of the following Cadwalader attorneys if you have any questions about this item:
Steven Lofchie; [email protected]
Jeffrey Robins; [email protected]
Maurine Bartlett; [email protected]
Glen Barrentine; [email protected]
Document Number
SEC PR 2011-20
Date
January 22, 2011
Cross References (links may require a Cabinet subscription)
SEC Staff Study Under Dodd-Frank § 913
Statement of Commissioners Casey Paredes
Dodd-Frank § 913
Investment Advisers Act § 206