Regulators that belong to the North American Securities Administrators Association (NASAA) have voted to incorporate the U.S. Securities and Exchange Commission’s (SEC) best interest duty into its model rule on brokers’ conduct.
The umbrella group of U.S state and provincial regulators announced that its members voted to adopt changes to its model conduct rule to align it more closely with the provisions of the SEC’s broker conduct rule, known as Regulation Best Interest (Reg BI).
In particular, the revised rule will now include Reg BI’s best interest duty of care for investment recommendations made to retail clients. It it will also specifically prohibit reps from the potentially misleading use of the advisor/adviser titles.
Last fall, NASAA announced the planned changes to its model rule on broker conduct, which have now been formally approved by the regulators that make up the group, following requests from a couple of its policy groups.
The group’s model rules are developed to provide blueprints that local regulators can use to craft rules for their own jurisdictions.
“The amendments adopted today will boost investor protection and help foster uniformity on these important issues across federal and state law,” the group said in a release.
“We look forward to working with our fellow NASAA members to implement these updated standards,” said NASAA president Leslie Van Buskirk.
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