State Regulators Begin Imposing Fiduciary Standards on BDs and IAs

Broker-dealers (“BDs”) and investment advisers (“IAs”) have witnessed a flurry of regulatory activity in recent years aimed at defining the duties each owes to its customers and clients and establishing civil and/or regulatory liability for a failure to fulfill those obligations.

At the federal level, the DOL’s fiduciary rule is now defunct and the SEC’s Regulation Best Interest appears far from implementation.  The states’ securities regulators, however, are plowing ahead.  Recently, Nevada released its long-anticipated proposed fiduciary duty rules (the “Proposed Rules”).[1]  A similar release from New Jersey is expected soon with more states, such as Maryland and Illinois, poised to weigh in as well.

Nevada’s Proposed Rules may influence forthcoming regulation by other state and federal regulators.  A Legal Alert detailing the Proposed Rules and their implications for BDs and IAs required to be registered in Nevada, and their representatives, can be found here.

If you have any questions about the contents of the Legal Alert or about the regulation of IAs and BDs generally, please feel free to contact us.

Paul J. Foley is a partner with Kilpatrick Townsend & Stockton’s Winston-Salem and New York offices.  Lauren Jackson is counsel and John I. Sanders and Ali Fenno are associates based in the firm’s Winston‑Salem office.



[1]  Notice of Draft Regulations and Request for Comment, State of Nevada, Office of the Secretary of State (Jan. 18, 2019), https://www.nvsos.gov/sos/home/showdocument?id=6156.

 

 

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