ADISA Co-Signs Letter to Nevada Securities Administrator

Aug 29, 2017

ADISA has once again joined major financial services trade associations and organizations in co-signing a letter to the Nevada Securities Administrator regarding SB 383 (now known as Ch. 322, Laws of 2017), which removes the exemption for broker-dealers, investment advisors and sales representatives from the definition of “financial planner,” and adds a new section stating that broker-dealers, investment advisors and sales reps “should not violate the fiduciary duty toward a client imposed by NRS 628A.020.”
As the Nevada Securities Administrator is currently drafting proposed regulations, ADISA and the other undersigned organizations provided a brief outline of primary concerns:

  • Not all broker-dealers, investment advisors and sales representatives will meet the definition of financial planner
  • Certain foundational activities, or activities not providing specific advice, should be excluded by the Rule
  • Developing a new fiduciary standard is problematic
  • Institutional investors and sophisticated governmental entities should be excluded from NRS 628A
  • Variable annuities should similarly be excluded from NRS 628A
  • The proposed rules should limit the scope of NRS 628A to customers with Nevada domiciles who have a financial planner registered in the State
  • Pre-emption remains a significant concern
  • The proposed rules should clarify that the new civil cause of action would not affect arbitration agreements
  • Under certain circumstances, the exemption for insurance providers applies when the individual holds both insurance and securities licenses
  • The new law is ambiguous and raises many questions 

Earlier this summer, ADISA co-signed a letter which laid out preliminary thoughts as the Nevada Securities Administrator began the drafting process of SB 383. Furthermore, ADISA Executive Director and CEO John Harrison and ADISA President John Grady of DLA Piper plan to appear before the Nevada State Securities next month.

You can read the letter in its entirety here.