The issue of creating a uniform fiduciary standard of conduct for investment advisers and broker-dealers in the U.S. has been hotly debated in recent years.
Although the U.S. Dodd-Frank Act gave the SEC authority to create a regulation that would impose a uniform fiduciary standard of care for retail investment advice — and a January 2011 SEC report recommended that the agency proceed with a rule — the agency has not taken action. Stalled for more than two years, a uniform fiduciary duty rule recently gained new momentum.
SEC Seeks Industry Input
Indeed, the SEC is now seeking input for a potential uniform fiduciary standard of conduct. While the SEC is specifically asking for data and other information relating to the costs and benefits of alternative standards of conduct for service providers (including a uniform fiduciary standard), it also welcomes comments on regulatory harmonization of standards. The SEC’s request comes after past court challenges led ultimately to other SEC regulatory initiatives being overturned.
CFA Institute Supports Single Standard of Care
Consistent with the CFA Institute Code of Ethics & Standards of Professional Conduct and in keeping with member survey results, CFA Institute has supported consistent treatment of all individuals and firms that engage in similar activities, regardless of the label assigned to the service provider. Thus, we advocate a uniform fiduciary duty standard for all who provide personalized investment advice about securities to retail customers.
For the SEC, this is an opportunity to eliminate misperceptions in the retail investor community by requiring all practitioners who offer personalized investment advice to act solely in the best interests of their clients.
It’s long overdue.
We encourage you to make your views known on this important issue. Submit your comment here by 30 June.
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