Kanjorski: SEC should define fiduciary standard

The Securities and Exchange Commission would be expected to define a fiduciary standard that would be applied to brokers and investment advisers, according to draft legislation released this afternoon by House Capital Markets Subcommittee Chairman Paul Kanjorski, (D-Penn.).
OCT 01, 2009
The Securities and Exchange Commission would be expected to define a fiduciary standard that would be applied to brokers and investment advisers, according to draft legislation released this afternoon by House Capital Markets Subcommittee Chairman Paul Kanjorski, (D-Penn.). The 114-page draft of the “Investor Protection Act” put forward by Mr. Kanjorski would require the SEC to issue rules requiring all financial service professionals who provide advice to act “in the best interest of the customer without regard to the financial or other interest of the broker, dealer or investment adviser providing the advice.” The Securities Industry and Financial Markets Association, which represents Wall Street, supports the idea of having the SEC develop a more precise definition of what it means to be a fiduciary. Indeed, fiduciary standards are currently ill defined, said Kevin Carroll, SIFMA's managing director and associate general counsel. However, the Investment Adviser Association does not want the SEC to issue new standards. “We think trying to define fiduciary duty would be a mistake,” IAA executive director David Tittsworth said. “It's no more appropriate to insist on a precise definition of fiduciary duty than it would be to insist on a precise definition of the duty not to commit fraud.” The bill also would double SEC funding over five years and provide new enforcement powers and regulatory authority, and it would ban the industry practice of requiring mandatory arbitration provisions in investor contracts. A hearing is scheduled to be held Oct. 6 in the House Financial Services Committee on adviser and other issues. Mr. Kanjorski also released a draft bill that would require hedge fund and other private fund advisers to register with the SEC, and another draft that would set up a Federal Insurance Office in the Treasury Department to monitor the insurance industry and recommend insurers that should be subject to systemic risk regulation by the Federal Reserve Board. The office would have the authority whether state insurance regulations should be pre-empted by international treaties.

Latest News

Next-gen woman advisor managing $200M switches from UBS to Sanctuary Wealth
Next-gen woman advisor managing $200M switches from UBS to Sanctuary Wealth

Advisor joins the Partnered Independence model for new firm launch.

How did US institutional investors navigate the choppy waters of Q4, 2024?
How did US institutional investors navigate the choppy waters of Q4, 2024?

Median return for institutions managing a combined $1.4T revealed.

Trump set to hit foreign steel imports with 25% tariffs
Trump set to hit foreign steel imports with 25% tariffs

Canada, Mexico appear to be included despite pause on other levies.

Dollar gains on tariffs as trade fears intensify
Dollar gains on tariffs as trade fears intensify

Strategists see potential inflation impact, more cautious Fed.

Bond market experts expect yields to continue higher
Bond market experts expect yields to continue higher

Uncertainty set to keep upward pressure on fixed income investments.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.