The North American Securities Administrators Association (NASAA) called on U.S. lawmakers Tuesday to take action in various areas to promote investor confidence, including requiring brokers to adhere to a fiduciary duty.
NASAA unveiled its advocacy agenda, highlighting areas where it plans to push for Congressional action. In particular, it urges Congress and the US Securities and Exchange Commission (SEC) to “expand the fiduciary standard of care currently applicable to investment advisers to broker-dealers who provide personalized investment advice.”
It says it opposes legislation that would authorize the SEC to designate a self-regulatory organization for investment advisers. “Rather than outsourcing responsibility for investment adviser oversight, Congress should provide the SEC with sufficient resources to examine all federally registered investment advisers,” it says, adding that it should enact legislation authorizing the SEC’s Office of Compliance Inspections and Examinations to collect user fees from the investment advisers it examines.
NASAA also says that Congress should pass legislation that would increase the civil monetary penalties the SEC can seek by linking the size of penalties to the amount of harm and investor losses; and that it should establish a private right of action for aiding and abetting violations of the federal securities laws. The group also says it will actively seek legislation to permit “reasonable civil recovery” for fraud associated with crowdfunding and other small offerings. And, it calls on Congress to empower states to provide investors with choices for dispute resolution, and to increase resources devoted to protecting older investors.
Additionally, NASAA is calling on Congress to investigate opaque market activities, including dark pools, hedge funds and high-frequency traders.
It also notes that it opposes legislation that would impose excessive analytical requirements on independent federal agencies, such as the SEC. “Bills which mandate numerous new cost-benefit analyses, or which vest regulatory analytical authority over independent agency rules with the White House Office of Management and Budget, could fracture the SEC’s capacity to regulate securities markets and protect the investing public,” it says.
“To help Main Street investors and businesses recover from the recession and financial crisis, we encourage the 113th Congress to focus its oversight and legislative energies on legislation that better protects investors and promotes economic growth,” said NASAA president and Arkansas securities commissioner, Heath Abshure.
Steve Irwin, NASAA president-elect and Pennsylvania banking and securities commissioner, added, “Taken together, the legislative priorities we have outlined today represent positive and progressive changes for the benefit of Main Street investors. They seek to level the playing field for investors by increasing industry and market accountability and transparency, balancing the capital formation needs of small business with strong investor protection, and providing a fair avenue for redress when things go wrong.”