NASAA Proposes Revisions to Model Business Conduct Rule

NASAA requested comment on proposed amendments to its model "Business Conduct" rule to "incorporate the core principles of Regulation Best Interest." 

Amendments to the "Dishonest or Unethical Business Practices of Broker-Dealers and Agents" model rule would clarify that broker-dealers must (i) make recommendations that are "in the best interest of the retail customer" and (ii) "make all reasonable efforts to avoid or eliminate conflicts of interest."

NASAA also proposed including a prohibition on the "misleading use of the professional title 'advisor' or 'adviser.'" NASAA said that the "blurring of brokerage and advisory services" can mislead investors to believe that a broker-dealer is acting in a fiduciary capacity. (See previous coverage.)

Comments are due by December 19, 2024.