The Washington, D.C.-based organization representing state securities regulators nationwide has thrown its support squarely behind Massachusetts’s proposal to create a tough, new fiduciary standard for brokers and advisors working with investors in the state.

The proposed regulation “would benefit Massachusetts investors,” Michael Pieciak, president of the North American Securities Administrators Association (NASAA), said in a comment letter. The rule would require that financial recommendations and advice must be in the best interest of customers and clients, without regard to the interests of the broker-dealer, advisory firm and its personnel.

While NASAA has not decided whether to develop a model standard of care rule for its members to consider, it is supporting a number of state efforts to do so, including regulatory and legislative pushes in Massachusetts, New Jersey, New York and Nevada.

“We are proposing this standard because the SEC [Securities and Exchange Commission] has failed to provide investors with the protections they need against conflicts of interest in the financial industry with its recent ‘Regulation Best Interest’ rule,” Massachusetts Secretary of State William Galvin said when he proposed the rule June 14.

The standard, which also requires that any commissions or transaction-based compensation a broker or adviser charges “must be the best of the reasonably available remuneration options for the customer.” 

“Right now, we are going through the large quantity of comments that were submitted on the final day of the preliminary comment period,” Debra O’Mally, a spokeswoman for the Massachusetts Secretary of State said. “After those have been digested and the proposed regulations have been finalized, we will schedule a formal hearing.”

The proposal has come under increased opposition from a new industry coalition of 12 powerhouse associations including the American Council of Life Insurers, US Chamber of Commerce, Financial Service Institute and SIFMA. The trade groups were the lead plaintiffs in a successful lawsuit that forced the US Department of Labor to vacate its fiduciary rule last year.

“We would encourage Massachusetts to allow Reg BI to be fully implemented before moving forward with a state-specific fiduciary rule,” the coalition said in its comment letter.