ICI Draft Comment Letter on SEC's IA/BD Study; Comments Due to ICI by August 27
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August 24, 2010
TO: INVESTMENT ADVISERS COMMITTEE No. 1-10SEC RULES COMMITTEE No. 35-10 RE: DRAFT COMMENT LETTER ON SEC'S IA/BD STUDY; COMMENTS DUE TO ICI BY AUGUST 27
As we previously informed you, the Securities and Exchange Commission is seeking comment for a study to evaluate the effectiveness of existing legal or regulatory standards of care for brokers, dealers, investment advisers, and persons associated with them when providing personalized investment advice and recommendations about securities to retail investors. [1] The Institute has prepared a draft comment letter, which is attached and briefly described below.
Comments must be filed with the SEC by next Monday, August 30. If you have comments on the attached draft letter, please provide them to Karrie McMillan by email at kmcmillan@ici.org no later than noon on Friday, August 27.
The draft letter focuses on the standard of care that should apply to both brokers and advisers and is consistent with Congressional testimony by the Institute on this issue. In particular, the draft letter expresses the Institute’s strong belief that “the clients and customers of investment advisers and broker-dealers deserve a strong, fiduciary standard of care that puts their interests above those of their intermediaries. This standard should be designed with differences between the two business models in mind, and with the goal of avoiding overlapping or unnecessary regulations.” The draft letter highlights several areas that the SEC should consider when undertaking its study and any subsequent rulemaking. It also discusses the intersection of this study with SEC efforts to reform Rule 12b-1 and any requirement for point of sale disclosure by brokers.
Karrie McMillan
General Counsel
endnotes
[1] See ICI Memorandum No. 24448 (July 28, 2010), available at http://www.ici.org/my_ici/memorandum/memo24448.