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In the wake of Friday’s announcement by the SEC that it would require a uniform fiduciary standard for both broker-dealers (BDs) and advisors when providing advice to retail customers, the Securities Industry and Financial Markets Association (SIFMA) said that it supported such a standard.
However, as reported by AdvisorOne, Ira Hammerman, SIFMA’s general counsel, said in a statement that the organization was concerned over such a uniform standard’s effects on BDs and their ability to serve customers as the standard is developed.
“SIFMA applauds the SEC in conducting this study. This is an issue that will affect how millions of individual retail investors obtain advice from hundreds of thousands of registered representatives and investment advisers,” Hammerman said in part.
He added that the organization appreciated the SEC’s recognition that such a standard “should not limit investor choice.” He then expressed the organization’s concern “about the possible effects on broker-dealers' ability to serve customers as this approach is developed,” and said that SIFMA will work with the SEC “to ensure that the broker-dealer role is not hindered.”
When asked about specific issues that the joint standard might cause for BDs, Andrew DeSouza, a SIFMA spokesperson, replied that SIFMA’s position was that having “the same standard, the same rules, and the same enforcement and oversight mechanism is a win for investors.” However, he said, the organization’s concern is that “potential rulemaking could create unintended negative consequences on the broker-dealer business model, which we think has worked well for investors.”
In response to a question about SIFMA’s first actions to lessen any negative issues’ impact on BDs, DeSouza said, “We're going to continue to discuss the study with our members and then work with the SEC and possibly Congress as they both continue to address this issue.”