NASAA Statement on Passage of Senate Financial Reform Bill

WASHINGTON (May 21, 2010) – The following is a statement from Denise Voigt Crawford, President of the North American Securities Administrators Association (NASAA) and Texas Securities Commissioner, following the passage Thursday of the Senate’s Restoring American Financial Stability Act of 2010. NASAA’s membership consists of the securities administrators in the 50 states, the District of Columbia, the U.S. Virgin Islands, Canada, Mexico and Puerto Rico.

“The Senate took a much-needed step toward strengthening our nation’s financial regulatory framework with the passage of the ‘Restoring American Financial Stability Act of 2010.’ State securities regulators urge lawmakers to ensure that the strongest possible investor protection provisions from both the House and Senate reform bills are included in the final reconciled bill that makes its way to President Obama’s desk for signature.

“We commend the Senate for adopting a number of important investor protection provisions, including the creation of a grant program to provide funding to the states to protect senior citizens from securities fraud, an increase in the assets under management threshold for state-registered investment advisers to $100 million from $25 million, and a provision to stop securities law violators from conducting private securities offerings under the SEC’s Regulation D Rule 506, a regulatory exemption for private securities transactions.

“However, we are disappointed the Senate did not include the Akaka-Menendez-Durbin amendment to extend the single most important investor protection – the fiduciary duty for brokers who provide investment advice. Instead, the Senate subjected investors to unwarranted delay with a provision to require the SEC to conduct a year-long study of the fiduciary issue.

“The House bill directs the SEC to issue rules requiring brokers who provide personalized investment advice to retail customers to have the same fiduciary duty as investment advisers. During the reconciliation process, the House provision will square off against the delay and dilution promised by the Senate study. The choice should be clear. Investors don’t need another study, they need help now. We are committed to working with lawmakers throughout the conference process to retain the House bill’s much stronger fiduciary provision.

“The debate over the most dramatic overhaul of our financial system since the Great Depression has been long and contentious, but the intense public scrutiny has helped educate investors about their rights and the reforms they need and deserve. State securities regulators remain dedicated to encouraging our lawmakers to stand up and do the right thing for investors.”

For more information:
Bob Webster, Director of Communications

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