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Mary Jo White Urges Harmonization of Broker-Dealer Rules in the US

by Victor Golovtchenko
  • Conflict of interest rules are to be devised by a growing number of U.S. regulatory agencies.
Mary Jo White Urges Harmonization of Broker-Dealer Rules in the US
Bloomberg
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The current chairwoman of the U.S. Securities and Exchange Commission (SEC) has voiced her opinion that U.S. regulators should be enforcing a set of standardized rules for all broker-dealers. During a congressional hearing, the 31st chair of the SEC, Mary Jo White, stated that the regulator should propose a harmonized regime for regulating all broker-dealers.

The chair hinted that a unilateral fiduciary standard for broker-dealers and Registered Investment Advisors (RIAs) is already being developed by the U.S. watchdog. The chairwoman said that raising the standards for advisors is one of the top priorities for her organization and retail investors will benefit greatly from a single standard of fiduciary duty for broker-dealers and advisors.

coordination with fellow regulators where we have overlapping jurisdiction is enormously important

While no specific timeframe has been provided, Mary Jo White highlighted that the complexity of the matter is preventing the SEC from making a quick decision on the matter.

“Where it stands right now is, essentially, that the staff's parameters of recommendation are being discussed with my fellow commissioners,” she explained.

Separately from the SEC, the U.S. Department of Labor is currently in the final stages of completing a "conflict of interest" which is aiming to prevent broker-dealers and RIAs from advising their clients to purchase products that have the potential to put the bottom line of the firms ahead of best interests of investors.

The rule has been in the works for almost a year and is expected to be finalized in the coming months.

The chairwoman elaborated that the SEC has the full authority to write broker-dealer rules and compatibility with other rules from other agencies will be taken into account by the Commission.

"The coordination with fellow regulators where we have overlapping jurisdiction is enormously important,” she said.

The current chairwoman of the U.S. Securities and Exchange Commission (SEC) has voiced her opinion that U.S. regulators should be enforcing a set of standardized rules for all broker-dealers. During a congressional hearing, the 31st chair of the SEC, Mary Jo White, stated that the regulator should propose a harmonized regime for regulating all broker-dealers.

The chair hinted that a unilateral fiduciary standard for broker-dealers and Registered Investment Advisors (RIAs) is already being developed by the U.S. watchdog. The chairwoman said that raising the standards for advisors is one of the top priorities for her organization and retail investors will benefit greatly from a single standard of fiduciary duty for broker-dealers and advisors.

coordination with fellow regulators where we have overlapping jurisdiction is enormously important

While no specific timeframe has been provided, Mary Jo White highlighted that the complexity of the matter is preventing the SEC from making a quick decision on the matter.

“Where it stands right now is, essentially, that the staff's parameters of recommendation are being discussed with my fellow commissioners,” she explained.

Separately from the SEC, the U.S. Department of Labor is currently in the final stages of completing a "conflict of interest" which is aiming to prevent broker-dealers and RIAs from advising their clients to purchase products that have the potential to put the bottom line of the firms ahead of best interests of investors.

The rule has been in the works for almost a year and is expected to be finalized in the coming months.

The chairwoman elaborated that the SEC has the full authority to write broker-dealer rules and compatibility with other rules from other agencies will be taken into account by the Commission.

"The coordination with fellow regulators where we have overlapping jurisdiction is enormously important,” she said.

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