NASAA President Heath Abshure’s Keynote Address at SIFMA (with Lofchie Comment)

Arkansas Securities Commissioner and North American Securities Administrators Association ("NASAA") President Heath Abshure delivered a keynote speech describing NASAA's legislative agenda for the 113th Congress. President Abshure set out NASAA's legislative priorities as follows:

• Class Action Relief.NASAA believes that, for crowdfunding to be successful, class action relief must be available to investors defrauded in a crowdfunding offering. NASAA's goals are to advocate against further restrictions to class actions, through both legislative means and appellate litigation, and to advocate for amendments to federal law to permit private lawsuits for fraud associated with small offerings;

• Arbitration.NASAA remains committed to ensuring that arbitration forums and procedures create an even playing field for aggrieved investors, and that arbitration should not be the sole forum available to them, especially those investing small amounts. To that end, NASAA will take steps to encourage the SEC to exercise its authority to propose or adopt rules prohibiting or conditioning pre-dispute agreements mandating arbitration, and, if the SEC is unwilling or unable to take action, then NASAA will encourage Congress to pass legislation to curb dramatically the use of these mandatory provisions; and

• Fiduciary Duty.NASAA supports the extension of fiduciary duty to broker-dealers and will continue to urge the SEC to exercise its discretion under Section 913 of the Dodd-Frank Act to engage in rulemaking that subjects broker-dealers to fiduciary duty.

Lofchie Comment: The SEC seems to be the only regulator that is taking a nuanced approach to the obligations that broker-dealers have to their retail customers. Other regulators simply endorse imposing a fiduciary obligation on broker-dealers without consideration of whether that means effectively making it uneconomic for consulting services to be provided to small investors. I urge firms to respond to the SEC's questions on broker-dealers' services provided to retail customers.

Click hereto view speech in full (links externally to NASAA website).