Developing a uniform fiduciary duty for both brokers and financial advisors is an important but not imminent concern for the U.S. Securities and Exchange Commission (SEC), according to Mary Jo White, the SEC’s chairwoman who spoke at the Ontario Securities Commission’s (OSC) annual conference in Toronto on Wednesday.
The SEC continues to examine the prospect of a uniform fiduciary duty, a task that it received as part of regulatory reforms that followed in the wake of the global financial crisis, White explained during a discussion at the OSC Dialogue 2016. However, although White represents just one vote at the SEC, she said she believes the U.S. regulator should act on the mandate to propose a uniform fiduciary duty.
That said, it’s important to not to curb investors’ access to advice, nor should a fiduciary duty necessarily rule out the use of commissions or other business lines such as proprietary trading, White cautioned. Furthermore, she stressed that an SEC proposal in this area is not imminent at this point.
In the meantime, the U.S. Department of Labor (DOL) has developed its own fiduciary rule that is due to be implemented next April.
The DOL’s fiduciary rule will be a game changer for the U.S. investment business as firms try to figure out how to comply with that rule, said Rick Ketchum, former chairman and CEO of the U.S. Financial Industry Regulatory Authority (FINRA), in a panel discussion at OSC Dialogue 2016.
The Canadian Securities Administrators is considering its own rule that would require advisors to put clients’ best interests before their own. That proposal, and a series of targeted reforms dealing with client/advisor relationships, will be the subject of upcoming public roundtables at various Canadian provincial securities commissions in the coming months.
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