On March 1, 2013, the SEC published a request for data and other information to assist the agency in considering whether to make new rules about the standards of conduct and regulatory obligations for broker-dealers and investment advisers when they provide personalized investment advice about securities to retail customers. This includes consideration of applying a fiduciary duty to broker-dealers when providing investment advice to retail customers. Find the full data request [here.]
By way of background, on December 21, 2011, Congressman Scott Garrett, Chairman of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, sent a letter to SEC Chairman Mary Schapiro expressing disappointment in the “SEC staff’s recommendation to impose a uniform fiduciary duty on broker-dealers and investment advisors” as authorized under Section 913 of the Dodd-Frank Act.
Garrett’s letter also referenced a September 13 Subcommittee hearing entitled “Ensuring Appropriate Regulatory Oversight of Broker-Dealers and Legislative Proposals to Improve Investment Advisor Oversight,” which consisted of testimony and discussion from financial services and insurance industry leaders, federal and state financial regulators, and consumer advocates. Garrett indicates that one of the most notable outcomes of this hearing was the “consensus view that there is currently no evidentiary basis for proposing new standard of conduct regulations under Section 913.” BDA provided a Statement for the record at that hearing, opposing the imposition of a fiduciary standard on broker dealers and focusing on the need for clear and accurate communication of information to the investor.
Chairman Schapiro responded to Congressman Garrett’s letter, outlining steps the SEC is taking to address both Garrett and BDA’s concerns, namely that SEC staff is in the process of “gathering, reviewing and analyzing…information necessary for a meaningful consideration of potential standard of conduct regulations for broker-dealers and investment advisors when providing retail investment advice.”
The BDA’s full statement can be found here.
Chairman Garrett’s letter can be found here.
Chairman Schapiro’s response letter can be found here.
