SEC Seeks Information to Assess Standards of Conduct and Other Obligations of Broker-Dealers and Investment Advisers

The Securities and Exchange Commission issued a request for data and other information that the SEC will review while considering alternative standards of conduct for broker-dealers and investment advisers when they provide personalized investment advice about securities to retail customers. A retail customer is defined as a natural person or his or her legal representative who receives personalized investment advice about securities from a broker, dealer or investment adviser and uses such advice primarily for personal, family or household purposes. The request for data summarizes the legal distinctions between investment advisers and broker-dealers, such as a fiduciary duty standard for investment advisers, and cites studies that suggest that many retail customers are not aware of the differences between investment advisers and broker-dealers.

Section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act grants the SEC the rulemaking discretion to adopt a uniform fiduciary standard of conduct for all broker-dealers and investment advisers when providing investment advice about securities to retail customers. In its request for data, the SEC provided that it is interested in receiving empirical and quantitative data and economic analysis relating to the benefits and burdens that could result from various alternative approaches to the standards of conduct and other obligations of broker-dealers and investment advisers.

Click here to read Release No. 34-69013.

 

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SEC

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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