U.S. securities industry lobbyists are opposing the introduction of state-level fiduciary standards, which several states are seeking after courts struck down a national standard created by the U.S. Department of Labor (DOL).
In a letter to securities regulators in Nevada, the U.S. Securities Industry and Financial Markets Association (SIFMA) calls for state officials to await the outcome of the U.S. Securities and Exchange Commission’s (SEC) ongoing effort to develop a new, uniform best interest standard before going ahead with a state fiduciary standard.
SIFMA argues that developing standards at the state level will result in conflicting conduct requirements, creating investor confusion and reducing investors’ access to information, advice and product choice.
“The most reasonable approach to protect investors and avoid investor confusion is to allow the SEC—the primary federal securities regulatory agency—to promulgate a uniform, nationwide, heightened, best interest standard of conduct for broker-dealers,” SIFMA argues.
“A state-by-state approach would result in an uneven patchwork of laws that would be duplicative of, different than, and/or in conflict with federal standards,” it says, adding that this would undercut the goals of investor protection.