Broker-Dealer Trade Group Supports Holding Registered Reps to Fiduciary Standard

July 17, 2009

The Securities Industry and Financial Markets Association (“SIFMA”) announced today that it supports the holding of broker-dealers and registered investment advisers to a new federal federal fiduciary standard when providing personalized investment advice. However, SIFMA noted that current standards and rules (apparently in lieu of a fiduciary standard) should apply to broker-dealers in those business areas where registered investment advisers do not offer services, such as raising capital for business or mergers and acquisitions.

SIFMA is one of the largest trade group for broker-dealers in the securities industry, and its support increases the likelihood that Congress will adopt the Obama Administration’s proposal to hold broker-dealers and their registered representatives to a fiduciary standard. Interestingly, the SIFMA announcement did not address issues such as the sale of proprietary product by registered representatives of broker-dealers and whether the Financial Industry Regulatory Authority (“FINRA”) should serve as the self-regulatory organizaiton (“SRO”) for SEC registered investment advisers. These are the type of details that will be subject a battle in Congress during the next few months.

Posted by Bryan Hill
Labels: Fiduciary