On Friday, June 25, 2010, the conferees from the House and Senate finished what they hope will be the final version of the financial regulatory reform bill. The bill contains a directive for the SEC to conduct a comprehensive study of all the issues involved in harmonizing the regulation of all providers of retail financial advice, including a fiduciary standard of care and enhanced supervision of RIAs. If signed into law, the SEC would be required to report the results of the study to Congress within six months. At the conclusion of the study, the SEC may promulgate rules that would impose an obligation to act in the best interest of the client without regard to the financial or other interests of the broker, dealer, or investment adviser providing the advice. On Wednesday, June 30, 2010, the House voted 237-192 to the final version of the financial regulatory reform bill. On Thursday, July 15, 2010, the Senate voted 60-39 to approve the Dodd-Frank Wall Street Reform and Consumer Protection Act. President Obama is expected to sign the bill into law the week of July 19.
SEC Chairman Mary Schapiro has indicated that she is ready to impose a universal standard of care on anyone who provides investment advice to retail clients. In a speech to the Society of Corporate Secretaries' national conference in Chicago, Ms. Schapiro praised the sweeping financial regulatory bill. She said, "I have long advocated such a uniform fiduciary standard and I am pleased the legislation would provide us with the rulemaking authority necessary to implement it." FSI is working to influence the six-month study related to the duty-of-care issue. We will keep you up to date on our latest efforts in next month's Advocacy Update.
Click here to read law firm Bingham McCutchen's analysis of the financial regulatory reform bill.
Click here to read Chairman Schapiro's July 9, 2010 speech at the National Conference of the Society of Corporate Secretaries and Governance Professionals.
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