SEC considers uniform fiduciary standard for dealers and investment advisers

On March 1, the U.S. Securities and Exchange Commission released a request for comments as it considers potentially harmonizing the standards of conduct of broker-dealers and investment advisers. While investment advisers are currently fiduciaries to their clients, broker-dealers are not uniformly subject to fiduciary standards. The notice suggests that retail customers do not appreciate the difference in duties, and expresses concern that the applicable regulatory obligations depend on the statute under which a financial intermediary is registered rather than the services provided.

As such, the SEC is requesting data and other information to assist it in determining whether to adopt a uniform fiduciary duty. Specifically, the SEC is interested in receiving empirical and quantitative data from respondents, including surveys of retail customers, information describing the extent to which different rules apply to similar activities of broker-dealers and investment advisers, and data analyzing retail customer returns generated under the two existing regulatory regimes. Comments are being accepted for 120 days after publication of the notice in the Federal Register.

As we discussed in October, the CSA has also recently released a consultation paper considering the feasibility of imposing a fiduciary duty on advisers and dealers. Comments on the CSA's paper closed on February 22.

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