State securities regulators back Nevada's fiduciary rule proposal

NASAA President Michael Pieciak: Draft regulations should curb abusive practices

Mar 7, 2019 @ 2:14 pm

By Mark Schoeff Jr.

While an organization representing state securities regulators focuses on guiding the direction of the U.S. Securities and Exchange Commission's investment advice reform proposal, the group also is supporting a separate Nevada effort to raise advice standards.

In a comment letter Thursday, the North American Securities Administrators Association Inc. said Nevada's proposal to impose a fiduciary duty on the state's brokers and other financial professionals would increase investor protection.

"The draft regulations should curb abusive sales practices in Nevada," wrote Vermont Commissioner of Financial Regulation and NASAA President Michael Pieciak. "The [Nevada Securities] Division will likely receive objections to the draft regulations from the securities industry; however, we must remember the securities industry has proven itself adaptive and can accommodate these new regulations."

Last week, several industry groups criticized the Nevada proposal, including the Securities Industry and Financial Markets Association, the Financial Services Institute and the Investment Adviser Association.

Each of them said such a Nevada rule would be pre-empted by a federal securities law, the National Securities Markets Improvement Act of 1996. The IAA argued that the Nevada rule shouldn't apply to SEC-registered investment advisers. FSI said the Nevada measure would foist more record-keeping requirements on Nevada brokers.

(More: Best interest standard must come with fiduciary teeth: Borzi)

But NASAA said Nevada has the right to promulgate its own advice regulation.

"The draft regulations are entirely consistent with the congressional intent in enacting NSMIA because states retain broad authority to regulate conduct standards," Mr. Pieciak wrote.

Earlier this week in an event on Capitol Hill, Mr. Pieciak said NASAA would not draft a model fiduciary rule for states to consider. Instead, it is concentrating its efforts on helping to shape the SEC's proposal, which revolves around the so-called Regulation Best Interest to raise broker requirements above the current suitability standard.

The SEC could release a final rule by this summer.

In addition to Nevada, legislative and regulatory efforts are underway in New Jersey and Maryland to strengthen advice requirements to reduce conflicts of interest.

"A lot of stakeholders at the local level want to protect investors, protect citizens in their states, and that's their prerogative," Mr. Pieciak said in Washington.


What do you think?

View comments

Recommended for you

RIA Data Center

Use InvestmentNews' RIA Data Center to filter and find key information on over 1,400 fee-only registered investment advisory firms.

Rank RIAs by

B-D Data Center

Use InvestmentNews' B-D Data Center to find exclusive information and intelligence about the independent broker-dealer industry.

Rank Broker-dealers by

Featured video


Why millennial demand for ESG is falling on deaf ears

Editorial director Fred Gabriel and senior columnist Jeff Benjamin say there's a disconnect between the big appetite for environmental, social and governance funds in 401(k) plans and their offering.

Latest news & opinion

Principal-Wells Fargo retirement deal would be among largest ever

Acquisition would be in line with trend of record keepers seeking to gain scale to combat fee reduction.

ESG options scarce in 401(k) plans

There's growing interest among plan participants, but reluctance to add funds that take into account environmental, social and governance factors persists.

Ameriprise getting ready to launch its bank

Firm's advisers will soon have access to lending products such as mortgages.

Envestnet acquires MoneyGuide for $500 million

Deal will allow Envestnet to deepen integrations between MoneyGuide and its other wealth management solutions.

Genworth move could signal big shift in distribution of long-term-care insurance

Insurers may turn to direct-to-consumer sales only, bypassing brokers and insurance agents.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print