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SIFMA announces best interests standard for U.S. broker-dealers

first_img This new standard “would articulate a legal and enforceable best interests obligation; consider investment-related fees as part of the best interests standard; avoid and/or manage material conflicts of interest; and provide disclosures about material conflicts and investment-related fees to enhance transparency,” SIFMA says. It could be articulated through amendments to the existing rules of the U.S. self-regulatory organization, the Washington, D.C-based Financial Industry Regulatory Authority (FINRA), says SIFMA. A best interest standard for broker-dealers, the association says, should: apply to all investment recommendations made to individual retail customers in all brokerage accounts, not just retirement accounts; provide “best interests” protections for retail customers; and follow the traditional regulatory approach of establishing a rules-based standard, including enhanced disclosure requirements, and robust examination, oversight, and enforcement by securities regulators, along with a private right of action for investors. “SIFMA’s best interests standard for broker-dealers is a comprehensive, investor-focused, regulatory solution that works within the existing regulatory framework,” says Kenneth Bentsen, Jr., president and CEO of SIFMA. “SIFMA has long supported the creation of a uniform fiduciary standard for broker-dealers and investment advisers. With multiple regulators considering different approaches which could result in bifurcated standards, redundant compliance regimes and investor confusion we believe this offers a path forward,” Bentsen says. James Langton Related news The U.S. securities industry has proposed a best interests standard as an alternative to the fiduciary standard that was put forward by the U.S. Department of Labor earlier this year. The New York City-based U.S. Securities Industry and Financial Markets Association (SIFMA) announced its best interests standard for broker-dealers serving retail clients on Monday. Keywords Best interest standardCompanies Securities Industry and Financial Markets Association FAIR Canada seeks clarity on client-focused reforms U.S. firm offers training for meeting DOL fiduciary standard FPSC proposes “duty of loyalty” for financial planners Share this article and your comments with peers on social media Facebook LinkedIn Twitterlast_img read more