The U.S. Chamber of Commerce (“Chamber”) Center for Capital Markets Competitiveness submits these comments in response to the North American Securities Administrators Association’s (“NASAA”) proposed revisions to its model rule on Dishonest or Unethical Business Practices of Broker-Dealers and Agents (“Proposal”). The Chamber has serious concerns with the Proposal and its likely ramifications. The Proposal meaningfully diverges from the Securities and Exchange Commission’s (“SEC”) Regulation Best Interest (“Reg BI”), which was adopted in 2019 as a robust, national standard of conduct for broker-dealers. Reg BI has successfully established robust standards of investor protection and increased transparency for retail investors. NASAA itself concedes that brokerdealers have demonstrated “helpful and steady implementation progress” and “enhance[ed] their policies and procedures to focus more directly on Reg BI obligations.”
Nonetheless, NASAA is embracing a choose-your-own-adventure approach for states that could result in a disjointed patchwork of standards across 50 different jurisdictions. Investors would be left to fend for themselves to determine what standards apply in which states and what services or products may be restricted because of rules adopted by a particular state.
