Corporate & Securities Law

By Jim Hamilton

NASAA Expresses Disappointment Over Aspects of Senate Financial Reform Bill

In a statement issued today, the North American Securities Administrators Association (NASAA) expressed disappointment over aspects of the financial services regulatory reform proposal released yesterday by Senate Banking Committee Chairman Christopher Dodd (D-CT). Commenting on the latest draft of the Restoring American Financial Stability Act of 2010, NASAA President Denise Voigt Crawford approved the bill's proposal to increase state regulatory authority over investment advisers with assets under management of $100 million or less. Crawford criticized, however, the bill's failure to impose a fiduciary duty on stockbrokers and insurance agents providing investment advice. Instead, Crawford noted, the latest draft has replaced "the single most important protection for individual investors" with a year-long study advocated by the securities industry.

NASAA also contrasted its call for an immediate end to mandatory securities arbitration with the bill's proposal merely to give the U.S. Securities and Exchange Commission (SEC) discretionary authority to do so in an unspecified timeframe. "NASAA believes investors deserve choice and that mandatory securities arbitration must end now," Crawford said.

Finally, NASAA expressed disappointment with a provision that provides the states with authority to review filings of private placement offerings made under Rule 506 of Regulation D, but only in cases where the SEC does not provide its own review within 120 days. "While this provision attempts to remedy the current situation in which there is essentially no federal or state regulation for private placements," Crawford said, "it is a disappointment for the investing public and deserves more meaningful and substantive consideration."

Full post as published by Jim Hamilton's World of Securities Regulation on March 16, 2010 (boomark / email).