The association of state securities regulators is not pleased with some of the compromises in the U.S. Senate Banking Committee’s latest regulatory reform proposals.

“In seeking to gain bipartisan support for his vision of creating a 21st century solution for today’s financial services regulatory structure, Senate Banking Committee chairman Christopher Dodd has offered a mixed bag of proposals that, in some cases, substitute accountability and protection with delay and dilution of the protections Main Street investors deserve immediately,” warned Denise Voigt Crawford, president of the North American Securities Administrators Association and Texas Securities Commissioner, in a statement.

She noted that NASAA is pleased with some of the bill’s proposed measures, but that it is particularly concerned that the bill backs away from a proposal to impose fiduciary standards on anyone providing investment advice.

“We are profoundly disappointed that the latest bill draft has removed the single most important protection for individual investors – requiring that stockbrokers and insurance agents providing investment advice act in the best interest of their clients,” she said. “This long overdue requirement has been replaced by an industry-supported yearlong study. Instead of offering protections, the reform package offers delay in the form of yet another study. Investors, particularly senior investors, need help and clarity now.”

Additionally, NASAA wants to see the end of mandatory arbitration to settle disputes between clients and their firms. “The new Dodd bill gives the SEC only discretionary authority to ban mandatory predispute arbitration in securities cases, but it does not require the agency to do so, nor does it set a timeframe in which to act. NASAA believes investors deserve choice and that mandatory securities arbitration must end now,” she added.

IE