NASAA urges fiduciary standard for broker-dealers

The North American Securities Administrators Association (NASAA) is calling for Congress to mandate a fiduciary standard for broker-dealers.

While U.S. investment advisors are subject to this standard, American broker-dealers aren’t.

Read: SEC seriously considers fiduciary rule

Problem is, “Most investors cannot distinguish broker‐dealers from investment advisors, nor do they understand the different legal standards applicable to either,” says NASAA in its legislative agenda for the 113th Congress, released today. “As a result, many investors are unable to make informed decisions as to the best type of financial professional to retain.”

Read: No fiduciary standard needed in Canada

As such, the organization wants Congress to have the SEC deem all financial professionals who provide investment advice fiduciaries.

NASAA is also seeking legislation to:

• authorize the SEC’s Office of Compliance Inspections and Examinations to collect user fees from the investment advisers it examines;
• permit reasonable civil recovery for fraud associated with crowdfunding and other small offerings;
• strengthen investor protection provisions weakened by the JOBS Act to minimize the Act’s enormous potential for abuse; and
• empower state regulators to curtail the use of mandatory pre-dispute arbitration clauses in contracts between state-registered investment advisers and their clients.

NASAA also wants Congress to investigate opaque market activities, including those of dark pools, hedge funds and high-frequency traders.

Read the full legislative agenda here.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.