Industry Advocates Criticize NASAA's Proposed Amendments to Business Practices Rule as Overreach

Posted on December 21st, 2023 at 2:30 PM

From the desk of Jim Eccleston at Eccleston Law 

The North American Securities Administrators Association (NASAA) is facing criticism from the Institute for Portfolio Alternatives (IPA) and the Financial Services Institute (FSI) regarding its proposed updates to the "Dishonest or Unethical Business Practices of Broker-Dealers and Agents”, commonly known as the "Business Practices Rule."

The critiques were conveyed through comment letters addressed to NASAA. NASAA asserts that the proposed amendments aim to align the rule with the Securities and Exchange Commission's (SEC) Regulation Best Interest and other industry developments. The key objectives of the revisions include:

  • Acknowledging and incorporating the new federal conduct standard, as per Regulation Best Interest, applicable to broker-dealers and agents.
  • Defining and clarifying various obligations or components of this new conduct standard for state interpretation and enforcement.
  • Prohibiting misleading uses of the titles "advisor" or "adviser."

According to the DIWire, IPA and the FSI have criticized the proposed updates as an overreach that could conflict with the Securities and Exchange Commission's (SEC) Reg
BI, potentially resulting in reduced access to affordable investment advice for retail investors.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, nasaa

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