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The IPA submitted comments in response to the Massachusetts Securities Division’s proposed regulations on fiduciary conduct standards. The full comment letter can be read here. The IPA also signed a coalition comment letter.
Our comments highlight several key concerns with the Massachusetts proposal, including:
  • The IPA strongly urges Massachusetts not to pursue formal rulemaking at this time and to allow firms to comply with SEC Regulation Best Interest and associated FINRA rule changes.
  • The IPA urges removal of the “best of” standard used in the Proposal, which is an outcome-based standard and unattainable for any firm.
  • The IPA recommends the broker-dealer’s duty apply only through execution of the recommendation, and not, as currently proposed, on an ongoing basis.
  • The IPA encourages Massachusetts to remove the language requiring advisors to “avoid conflicts of interest” or make recommendations “without regard to” their financial or other interest.
  • The IPA suggests that the regulation expressly apply only to retail customers that are legal residents of or reside in Massachusetts, and implementation be at least 18 months.
  • Finally, the IPA urges consideration of preemption and other legal concerns.
The IPA will continue to discourage state-based fiduciary regulation simultaneous with the new SEC Best Interest rule, as conflicting federal and state requirements create confusion and uncertainty for firms, financial professionals and their clients.