ADISA Joins Coalition in Joint Comment Letter to Massachusetts on Proposed Fiduciary Regulation

Jul 26, 2019

ADISA joined major financial services trade associations as a signatory to a letter to the Office of the Secretary of the Commonwealth, Massachusetts Securities Division, regarding proposed regulation “to apply a fiduciary conduct standard on broker-dealers, agents, investment advisers, and investment advisor representatives when dealing with their customer and clients.”
 
The joint comment letter urged the Massachusetts Securities Division to consider the following:
 

  1. Regulation Best Interest’s heightened standard adds substantial and meaningful new investor protections.
  2. A “Best of” standard is impossible to statisfy and should not be used.
  3. An ongoing monitoring requirement is inconsistent with a brokerage model and will likely limit consumer choice.
  4. An “Avoid Conflicts” requirment is unworkable.
  5. The Proposal’s “without regard to” language is highly problematic.
  6. The Proposal should be amended to expressly exempt variable annuities.
  7. The Proposal should be amended to explicitly exempt principal transactions.
  8. The Disclosure Obligation should be made consistent with Reg BI.
  9. The Proposal provides no guidance on how to address cost.
  10. Any regulation should be limited to customers with Massachusetts domiciles.
  11. The Proposal raises pre-emption and other legal concerns.
  12. Any final regulation should include a reasonable implementation period and effective date. 
You can read the letter in its entirety here.
 
In addition to the joint letter, ADISA submitted its own letter to the Massachusetts Securities Division on Friday, July 26.