Fiduciary Legislature at the State Level Slows But Continues

With the Department of Labor’s fiduciary rule no longer in effect, and the SEC taking comment on its own proposal for a best interest regulation, some states are still pursuing their own fiduciary standards -- at different paces, InvestmentNews writes.

A bill in the New York Assembly written by Assemblyman Jeffrey Dinowitz, D-Bronx, which would have forced non-fiduciary advisors to disclose that they’re not fiduciaries, never made it out of a secondary committee, for example, according to the publication. But the bill had no companion bill in the state senate, so its progress was encouraging and the assemblyman plans to re-introduce it at the end of the year, Dinowitz’s legislative director tells InvestmentNews. Meanwhile, New Jersey and Illinois have similar bills that are still in play, according to the publication.

"We’re talking with the financial industry about their concerns; that’s why we haven’t moved forward," New Jersey Assemblywoman Nancy Pinkin, D-Edison, tells InvestmentNews.

The Nevada legislature, on the other hand, has already signed into law a bill requiring financial advisors working in the state to abide by the fiduciary standard, InvestmentNews writes. The bill is pending a rule-making procedure that would officially make it into law, however, according to the publication.

"We are hoping to release proposed regulations soon on the fiduciary duty law passed in Nevada last session," Diana Foley, Nevada securities administrator, tells InvestmentNews in an email. "We do continue to stay abreast of any law or regulation changes that may be informative, or may impact broker-dealers or investment advisers, such as the SEC proposals and the federal court cases involving challenges to the DOL rule."

Many state legislatures, meanwhile, will not be in session until 2019, the publication writes. In January and February, there may be more activity around state fiduciary laws, including in California, Massachusetts and Michigan, George Michael Gerstein, counsel at Stradley Ronon Stevens & Young, tells InvestmentNews.

 He adds that more states may follow the lead of Massachusetts Secretary of the Commonwealth William Galvin, who’s pursuing a fiduciary rule case against Scottrade, according to the publication.

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