Establishing a uniform fiduciary duty for both broker dealers and investment advisors remains a top priority for the U.S. securities industry lobby group, the acting head of the Securities Industry and Financial Markets Association (SIFMA), said Thursday.
Speaking at SIMFA’s private client conference in Chicago today, acting president and CEO of SIFMA, Ken Bentsen, discussed some of the group’s regulatory reform priorities, noting that a uniform fiduciary standard remains a top concern. “Clients’ best interests deserve to be put first,” he said, adding that it is working with U.S. regulators on the formulation of a common standard.
Along with a uniform duty, Bentsen also said there should also be uniform supervision of brokers and advisors, and that it supports the establishment of a self-regulatory organization to supervise independent advisors.
However, he also stressed that it opposes simply applying the existing legislation governing investment advisors (who are already subject to a fiduciary duty) to brokers. “Just as we will work tirelessly to promote investor protection through a new uniform standard, so too will we oppose bad policy,” he said.
In terms of systemic risk, he also urged regulators “to coordinate across borders, recognize what has already been done and conduct proper cost-benefit analysis”, when it comes to raising capital requirements, introducing resolution authority, and other measures designed to end “too big to fail” policies.
Market structure issues are another priority. “SIFMA supports reform and compliance initiatives that strengthen markets and improve regulatory supervision,” he said, noting that it recently published a white paper setting out what it believes is “the best path forward for the creation of a consolidated audit trail”.
However, he also noted that, “… regulatory reform alone is not enough to restore trust and confidence in the financial system.”
“We know that our industry has a responsibility to proactively identify business practices that will make firms more resilient and enhance confidence with our clients, policymakers, and the public,” he concluded. “Our board of directors has recognized that the industry must redouble its efforts to appropriately convey, and exhibit by our actions, to our clients that we are committed to bolstering their confidence in markets. Without this, the good intention of a rule or regulation would be lost.”