States should work more with each other and with federal regulators to stop emerging threats to investors, according to the new leader of state regulators.
Increasing collaboration is at the top of the agenda for Minnesota Commissioner of Commerce Mike Rothman, the new president of the North American Securities Administrators Association.
“I plan to focus on enhancing resources, data and analytics opportunities within NASAA, and working collaboratively across our jurisdictions to find ways to better share information and stay on top of the latest fraud and criminal activity,” Mr. Rothman said in his
inaugural address at the NASAA annual conference in Providence, R.I. on Tuesday.
Mr. Rothman, 54, began his one year term at the NASAA meeting. As head of the Minnesota Department of Commerce, he oversees the agency's regulation of 20 industries, including securities, insurance, financial institutions and real estate.
He was appointed to the office in 2011 by Minnesota Gov. Mark Dayton. He and his wife Shari have three children.
Mr. Rothman spoke with
InvestmentNews on the sidelines of the NASAA conference. The interview has been edited for length and clarity.
InvestmentNews: How do you do data analytics across 50 states?
Mr. Rothman: The idea is to develop within NASAA the framework of cooperation and collaboration so that we are more efficient to be able to harness what we know as states. If Minnesota knows something, we will ping each other and ask other jurisdictions: Are you seeing this as well? It includes looking at the analytics, connecting the dots.
InvestmentNews: You also mentioned cybersecurity as a priority. Are financial advisers taking it seriously enough?
Mr. Rothman: It's a spectrum. There are some who are taking it seriously and some who are not. Some are not paying attention to it because they don't want to pay the cost. Some are waiting to see if it's going to hit them. It's the wrong approach. They need to be prepared. There is no question that cyberattacks are going to increase. As you go forward, you have to look at three basic things: prevention, mitigation and, if you do happen to get hit, recovery.
InvestmentNews: States regulate investment advisers with $100 million or fewer assets under management. Would you like the Securities and Exchange Commission to raise that ceiling?
Mr. Rothman: I think for the moment what was adopted has been a good spot. We're carefully assessing where that appropriate level might be. We need to have very thoughtful consideration or dialogue in determining whether or not that might be an appropriate step.
InvestmentNews: Are the states going to enforce the Labor Department fiduciary rule ?
Mr. Rothman: It's going to be part of what we look at. There's no doubt. State regulators look at both federal and state law. NASAA's been a proponent of a fiduciary rule in a broad fashion. I think it clarifies things in terms of what is suitable and what is not suitable and going back to basics. It's what's best for the investor, and that's a pretty clear standard.
InvestmentNews: NASAA's emphasis on senior financial abuse is well underway. What are you going to add to it during your year as president?
Mr. Rothman: The Senior Safe bill could pass during the lame duck [session of Congress]. Once that happens, NASAA will provide the training called for under the federal legislation. We've got a lot of work to do. We [also] will increase our efforts to pass the [NASAA]
model act in the states. It's a broader framework than the federal legislation. It's not just going to sit on the shelf.
