Financial Planning: New Jersey fiduciary rule: Time to speed up or slow down?

The American Securities Association — an industry trade group representing regional broker-dealers — is calling on the state’s Bureau of Securities to hold new public hearings to prevent the regulation from wreaking havoc in unforeseen ways.

The bureau’s fiduciary rule “would fundamentally alter the relationship that currently exists between broker-dealers and their retail clients in the state of New Jersey and this could have a negative impact on the state’s finances,” Christopher Iacovella, CEO of the American Securities Association, said in a comment letter to the regulator.

The association’s letter is indicative of one way Wall Street firms and groups are responding to the Garden State’s proposal. The other extreme is Nevada, which has faced fierce opposition to its own fiduciary rule. Several major brokerage firms, including Morgan Stanley, have threatened to pull businessfrom the state should its proposed regulation go into effect.

In its letter to the New Jersey regulator, the American Securities Association echoed some industry concerns about Nevada’s proposal. The association pointed to issues including regulatory costs, compatibility with federal regulations and the length of the proposed implementation period.

“These and other concerns have not been fully developed and are ripe for a public hearing by the bureau,” Iacovella wrote.

He added: “In our experience, a public hearing allows citizens, industry, and policymakers to engage in a fulsome discussion that bolsters transparency and ensures a diversity of views are presented throughout the process.”

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