SIFMA VP Discusses Labor Proposal and Cybersecurity Efforts

At SIFMA's 2015 Leaders and Experts Forum, industry leaders provided their perspective on the rest of the year's regulatory and enforcement initiatives for compliance and legal professionals. SIFMA Executive Vice President and General Counsel Ira Hammerman delivered the opening remarks, which highlighted recent and upcoming regulatory and enforcement initiatives.

Mr. Hammerman commented on the reproposal by the Department of Labor ("DOL") of its "conflicts of interest" rule. If "done improperly," he said, the rule could hurt investors saving for retirement and "make the process that much more expensive for all concerned." He stated that SIFMA and its members have long endorsed the development of a best-interest standard when broker-dealers provide personalized investment advice about securities to retail investors, and that SIFMA is "very concerned" that the DOL's proposed rule "will actually harm the savers it intends to protect, as it appears to put forward a very prescriptive set of requirements that are extremely complex to understand and implement." Mr. Hammerman also criticized the DOL's proposed definition of "fiduciary" as being too broad.

He asserted that the Best-Interest Contract Exemption would (i) subject firms and advisors to a new legal liability, (ii) explicitly limit investors' choice of product, (iii) impose level fees at the firm level and (iv) require firms to develop and build new disclosure and compliance regimes.

Mr. Hammerman also said that SIFMA has been "working tirelessly to help the industry in its cybersecurity and business continuity planning efforts." He said that SIFMA is promoting the adoption of the NIST cyber framework, developing best practices for firms to help mitigate cyber threats, and encouraging Congressional action to enhance firms' ability to work with the government.

See:Mr. Hammerman's Speech; Leaders and Experts Forum Information.
Related news: FINRA and SIFMA Executives Discuss Labor Proposal and the Best-Interest Standard for Broker-Dealers (May 27, 2015).