SEC Study Recommends Uniform Standard of Care

January 26, 2011

On the evening of January 21, 2011, staff at the Securities and Exchange Commission submitted the findings of its study of the standards of care used by brokers, dealers and investment advisors in providing investment advice to retail clients.  The study was mandated by Section 913 of the Wall Street Reform and Consumer Protection Act of 2010.

SEC staff recommends that the Commission consider “rulemakings that would apply expressly and uniformly to both broker-dealers and investment advisers…a fiduciary standard no less stringent than currently applied to investment advisers.”

The study and recommendations were authored by SEC staff and do not carry the weight of law. The five SEC Commissioners still need to vote on a final rule, which may or may not reflect the recommendations made by the standards of care study.

SEC Commissioners Troy Paredes and Kathleen Casey issued a joint statement opposing the study’s conclusions and expressing concern about the study’s shortcomings.

No timeline has been set for the implementation of a rule.  NAILBA government affairs staff expects any rulemaking to be an extensive process and we will continue to work with our industry partners on this critical issue.

Questions? Contact Mark Valentini, Manager of Government Affairs at or 703-383-3073.