SIFMA Opposes Bill Requiring SEC to Conduct Pre-Testing of Retail Disclosure Documents

In a letter to the House Financial Services Committee, SIFMA expressed opposition to the "SEC Disclosure Effectiveness Testing Act," which would require the SEC to conduct investor testing of any retail disclosure document.

SIFMA stated that while it favored the general concept of the bill, it opposed passage on the ground that the bill could:

• delay the implementation of rules intended to protect investors, including the SEC's pending Regulation Best Interest and the related proposal mandating the distribution of a Form Client Relationship Summary; and

• be interpreted to subject all current investor disclosure mandates applicable to broker-dealers under federal securities laws to "retroactive review" and investor testing.

SIFMA noted that an investor testing requirement for all past and future broker-dealer rules regarding disclosure to retail investors would be a burden to the SEC and disruptive for financial services firms and their clients.