Securities Law Prof Blog

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

Sunday, January 15, 2012

Don't Expect a Fiduciary Duty Standard Anytime Soon

On Jan. 22, 2011, the SEC delivered to Congress its report, mandated under Dodd-Frank, on a fiduciary duty standard for all investment advisers and broker-dealers that make personalized investment advice to retail customers.  Although Dodd-Frank does not require the SEC to promulgate a universal fiduciary duty standard, Chairman Mary Schapiro repeatedly stated throughout 2011 that the agency planned to do so soon.  It is now 2012, and it appears unlikely that the agency will propose a standard this year.  The SEC website lists the action as "dates to be determined," and last week Ms. Schapiro sent a letter to Rep. Garrett, Chairman of the House Financial Services Capital Markets Subcommittee, stating that the agency will gather information for an economic analysis of the impact of such a standard and is drafting a public request for information.  Gathering and analyzing the information could take all of 2012; indeed, some believe the fate of any proposal turns on the Presidential election.  For further information, see Inv. News, Broker fiduciary rule officially in limbo

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