Maryland is the latest state seeking to institute their own fiduciary standards for broker-dealers ahead of the Securities and Exchange Commission’s (SEC) Regulation Best Interest proposal.
On Monday, February 4, four state senators introduced a bill, the Financial Consumer Protection Act of 2019, which includes a subsection that would define broker-dealers and insurance agents as fiduciaries. No hearing date has been set for the bill.
The proposal comes on the heels of a January report from the Maryland Financial Consumer Protection Commission which recommended that the state institute a fiduciary standard for brokers and insurance agents. The state’s move to make its own rule comes in the wake of the death of the Department of Labor’s (DOL) fiduciary rule for brokers managing retirement savings and the SEC’s subsequent proposal.
‘In light of the Commission’s January report, we are not completely surprised by these developments,’ said George Gerstein, a fiduciary governance attorney at Stradley Ronon Stevens & Young. ‘This also reflects a broader trend of greater state activity with respect to broker-dealer standards of care prior to the SEC finalizing Regulation Best Interest.’
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