Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, January 24, 2011

SIFMA on SEC Staff's Fiduciary Duty Study

Here's SIFMA's statement on the SEC Staff's Study on Investment Advisers and Broker Dealers.  Bottom line -- it pretty much got what it wanted.

“SIFMA applauds the SEC in conducting this study on the effectiveness of existing standards of care for broker-dealers and investment advisers and whether there are gaps and overlaps.  This is an issue that will affect how millions of individual retail investors obtain advice from hundreds of thousands of registered representatives and investment advisers.

“We support a uniform fiduciary standard of care for broker-dealers and investment advisers, and upon initial review we believe that the SEC has appropriately articulated a workable comprehensive approach for personalized investment advice for retail customers.  It is especially important that the SEC recognized that any fiduciary standard should not pick business model winners and losers, and that the Commission will need to issue interpretive guidance to allow firms to operationalize this new standard.  

“We also appreciate the Commission’s recognition that as a fiduciary duty is applied to brokers and investment advisers, such a standard should not limit investor choice.  Nevertheless, we remain concerned about the possible effects on broker-dealers' ability to serve customers as this approach is developed and will continue to work with the SEC to ensure that the broker-dealer role is not hindered.

 “In addition, we hope that as the SEC works to implement a comparable standard of care between broker-dealers and investment advisers, it likewise will provide leadership in applying comparable oversight, examination and enforcement to retail registered investment advisers.  Only if a uniform fiduciary standard of care is combined with effective oversight, examination and enforcement program can investor protection truly be achieved.”

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Posted by: Fulcrum Inquiry | Feb 3, 2011 11:31:03 AM

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