Trade associations clash over principal trades
Author: Danielle Myles | Published: 17 Apr 2012
Dueling comment letters from the US investment
industry’s foremost trade associations have
brought principal trades to the forefront of the long running
debate on broker-dealer fiduciary obligations.
In-house brokerage counsel have called for a bigger picture
analysis which goes beyond the current focus on
semantics. A March 28 letter to the Securities and
Exchange Commission (SEC) from seven investment advisor
associations responds to, and disagrees with, points raised by
Sifma in its July 2011 comment letter on the same topic.
Section 913 of Dodd-Frank mandated the SEC to study whether
broker-dealers should be subject to a fiduciary standard "no
less stringent than the standard applicable to investment
advisers" under the Investment Advisors Act 1940 (the 40 Act)
when providing personalised investment advice to retail
The SEC’s report last year recommended this
change. And Sifma and the investment associations agree a
uniform fiduciary standard is needed in this situation.