CLARIFY NEW JERSEY PROPOSED FIDUCIARY RULE REGULATION, PRN 2019-044, 51 N.J.R. 493(a)


Please sign this petition by June 13, 2019

The New Jersey Bureau of Securities is promulgating a fiduciary duty rule. The Bureau will be accepting public comments until June 14, 2019. We urge you to sign the petition.
 
As currently written, this proposal adds multiple, new legal requirements that are likely to negatively impact Broker-Dealers and advisors, while also harming clients. These include:

  • adding new obligations nonexistent under federal law and regulation;
  • requiring “best of” decisions without defining that term;
  • imposing a fiduciary duty obligation on dealings with prospective clients, and
  • requiring Broker-Dealers to monitor the performance of their customers’ accounts on an on-going basis in contradiction to federal requirements.
 
ADISA agrees with the need to engender clear standards around investment advice provided by all financial professionals. We further recognize the need to help New Jersey investors build and maintain diverse portfolio choices with confidence.
 
Therefore, we urge the State to add greater clarity to:
 
  • The "best of reasonably available options" contained in Subsection (b)2i, and
  • The “best of the reasonably available fee options” in Subsection (b)3.
 
These changes will ensure that Broker-Dealers and their registered representatives who recommend alternatives:
 
  • Can align their conduct and fees with all aspects of the Rule given the unique nature and ability to compare products by any single broker-dealer; and
  • Satisfy the duty of due care.

 
"Non-traded" or non-marketable investment products are distinct from their publicly-traded counterparts in their applicability and availability to retail investors. A duty of care by financial professionals to consumers absolutely must be maintained, in a manner that is consistent with the unique aspects of the alternative investment sector. The State should make this point unambiguous in the Final Rule.
 
You can make your voice heard too! ADISA urges the community of investment professionals, whether located in or doing business in New Jersey, to sign a petition to the New Jersey regulators supporting this position. Additionally, we invite you to add comments to the petition in conjunction with your signature. Most elected and appointed officials find value in the personalized insights and stories of impact, so we encourage you to provide that depth.
 
Here is the text of the Proposed Regulation.
 
The Press Release announcing the proposed regulation can be found here.