• The rules would conflict with the congressional intent expressed in the Advisers Act, the position of SEC, and the New Jersey Uniform Securities Law and it is preempted by federal law.
In sharp contrast, proponents of the fiduciary standard urged the state to proceed with a rule to close the investor protection gap they said was left by the SEC's new regulations.
“The state of the fiduciary standard in federal regulation is in major disrepair. Leadership from New Jersey and other states is timely and vital,” testified Knut Rostad, president of the Institute for the Fiducary Standard, according to a transcript provided by the institute.
“Reg BI is widely opposed outside Wall Street and Washington. ... This additional risk puts even greater importance on New Jersey’s actions,” said Rostad.
“Now that it’s clear how utterly the SEC has failed to meaningfully improve investor protections in retail investment advice markets, the need for state action is stronger and clearer than ever,” Micah Hauptman, financial services counsel at the Consumer Federation of America, said in a written statement.
“The bureau is well within its authority and should proceed with this important rulemaking and provide the strong protections that New Jersey investors reasonably expect and desperately need, but are not being provided by the SEC,” he added.