Nevada Oversteps Its Authority on Fiduciary Reg: Trade Groups
March 5, 2019 by Melanie Waddell
Industry trade groups told the Nevada Securities Division on Friday that it should not only hold off in moving forward with its draft fiduciary duty regulation until the Securities and Exchange Commission finalizes its Regulation Best Interest — which is likely to be published before the fourth quarter — but that the state is reaching beyond its legal authority.
In a joint comment letter, a number of groups — including the Securities Industry and Financial Markets Association, the Financial Services Institute, the U.S. Chamber of Commerce, the American Council of Life Insurers, the National Association of Insurance and Financial Advisors, and the Insured Retirement Institute, among others — argued that the SEC is “developing a uniform, nationwide, heightened best interest standard of conduct for broker-dealers,” and that “a national standard provides enhanced investor protection, avoids investor confusion, and is much easier to administer and operationalize than an uneven patchwork of state laws.”
If Nevada decides to move ahead before SEC issues Reg BI, the group stated, “we would suggest you clarify that firms that comply with Reg BI, once adopted, will be deemed to be fully compliant with the Nevada law.”
Nevada’s Legislature passed its own fiduciary statute for securities in 2017, but the law couldn’t be implemented until regulations were put into place. Nevada issued those proposed regs on Jan. 18, with a comment period that expired Friday.
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