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U.S. House Passes Resolution Urging the SEC to Work With State Securities Regulators

U.S. House Passes Resolution Urging the SEC to Work With State Securities Regulators

The resolution puts pressure on the SEC to collaborate more with state securities regulators, especially on matters of investor protection.

The House of Representatives passed a bipartisan resolution Tuesday emphasizing the importance of state securities regulators in investor protection and urging the Securities and Exchange Commission to collaborate more with these regulators.

U.S. Rep. Ayanna Pressley (D-Mass.), a member of the House Financial Services Committee, introduced the resolution last month in honor of the 100th anniversary of the North American Securities Administrators Association (NASAA), the voice of state securities agencies.

“Over the last 100 years, state securities regulators in Massachusetts have played a crucial role in protecting and educating American investors,” Pressley said in a statement. “NASAA and the regulators they represent have been leaders in ensuring stability and equity. I’m proud to honor 100 years of the NASAA’s important investor-protection work and I look forward to 100 more.”

The SEC released its Regulation Best Interest rule for retail investment advisors and broker/dealers in June. But several states have been coming out with their own standards of conduct for advisors, including Nevada, New Jersey and Massachusetts, Pressley’s home state.  

“State securities regulators are known for their accessibility and accountability to the investing public and have been willing to push the envelope when it comes to protecting investors,” the resolution states.

The resolution also urges states to continue to work independently or with NASAA to protect investors.

Secretary of the Commonwealth of Massachusetts William Galvin argued that the SEC’s Reg BI didn’t go far enough in protecting investors against conflicts of interest and that the new disclosure requirements “cannot replace a clear fiduciary standard of conduct, which is the basis for the Division's proposal.”

For the nascent fiduciary standards developing at the state level, opponents and supporters alike agree that a court challenge regarding preemption is likely imminent, and any ruling will have an impact on how other states proceed to enact their own regulations.

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