Schapiro: SEC seeking public input on investment adviceNews added by ProWEB Media on July 29, 2010
Gary Linnell

ProWEB Media

Joined: December 27, 2005

The Securities and Exchange Commission (SEC) is seeking public comment on a provision addressing the standard of care for investment advice, according to Chairman Mary Schapiro.

The regulator began formally soliciting input earlier this week, shortly after President Obama signed the new financial regulatory reform legislation into law, and the SEC is "expanding our [comment] process beyond what is legally required," she said. She added that the SEC will create e-mail boxes on its Web site which will be organized by topic and deployed based on the order in which rules are implemented.

"The idea is to offer maximum opportunity for public comment and to provide greater transparency. We are inviting public comment even before the various rules are proposed and before the official comment periods have begun," Shapiro said.

The new law will give the SEC the power to institute a uniform standard of conduct on anyone providing investment advice to retail customers once the agency has conducted a six-month study of the differing standards under which investment advisors and broker/dealers currently operate.

Currently, advisors must meet a fiduciary standard that requires them to act in the best interest of clients and disclose all conflicts of interest. Meanwhile, broker/dealers must currently meet a suitability standard that requires them to offer products that meet client needs and timelines.
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