SIFMA Endorses SEC’s Development of Regulation Best Interest (“Reg BI”)
For decades, broker dealers have had the regulatory obligation to make sure that an investment sold to a customer is suitable for that customer. The brokerage firm would typically charge a commission for its services, since the transaction is the broker’s focus. Whereas an investment advisory firm has always had a “higher” fiduciary obligation to ensure that its advice places the client’s interests ahead of its own. An adviser focuses on the client relationship, typically charging either fixed fees for its advice or fees based upon the value of a client’s account. This difference between brokers and advisers and the way they engage clients has always been a fundamental financial industry distinction.
The Securities Industry and Financial Markets Association (“SIFMA”) came out in March in support of the SEC’s development of Regulation BI, which would enhance broker conduct beyond current standards by adding new and heightened care, disclosure, and conflicts-of-interest obligations in a way that would not limit customer access to brokers or choices of investment products.
SIFMA Blog on Reg BI
SIFMA Statement to the House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets
The End of the Beginning: Digital Token and Currency Exchanges to be Regulated
A recent panel discussion at New York law firm, Sullivan & Worcester, LLP, entitled Token Exchanges: The promise of liquidity, compliance and stability, discussed sea changes in today’s global economies and the financial markets, and the shift to new forms of digital investment and mediums of exchange. Joel Telpner, partner and the Chair of the Fintech & Blockchain Practice at Sullivan & Worcester, made the case that U.S. government policy is by no means behind the curve and that we should see methodical deliberate action over the course of the next year, including three predictions: (i) the SEC should provide guidance on what forms of digital currency should be categorized as securities tokens and which should not; (ii) the CFTC should provide guidance on what forms of tokens and currencies fall under CFTC regulation; and, (iii) in the new curious case of Stablecoins, which are neither securities or commodities, government policy should shed light on how these and other digital currencies will be regulated.
Forbes: Three Bold Predictions
Rise of a Cashless Society
What Are Securities Tokens?