Fiduciary Duties and New Best Interest Standard: The SEC Weighs In

14 May 2018
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Key takeaway
  • On April 18, the U.S. Securities and Exchange Commission (the “SEC”) proposed two rules designed to enhance the quality and transparency of the duties owed by investment advisers and broker-dealers to retail investors.
  • The SEC also issued proposed interpretative guidance concerning the standard of conduct applicable to investment advisers under the Investment Advisers Act of 1940.
  • The package of proposals is the SEC’s response to the concern, addressed by the controversial “best interest” rule promulgated by the Department of Labor, that many investors do not clearly understand the differences between broker-dealers and investment advisers and its desire to clarify and, in the case of broker-dealers, enhance, the standards of conduct owed to retail investors.