Dodd-Frank Overview

On Wednesday, July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, which demonstrates the recognition by federal lawmakers of the strong investor protection role of state securities regulators.

The Dodd-Frank Act ushered in a new era of  heightened investor protection and strong financial market oversight to help prevent another economic crisis from occurring. State securities regulators are eager to help accomplish this important mission on behalf of Main Street investors throughout the country.

Our work is far from complete. State securities regulators have 100 years of experience and expertise to contribute to a cohesive regulatory system, and we welcome the opportunity to work with other regulators to ensure that the studies, rulemakings and implementation procedures of the Dodd-Frank Act actually protect investors and strengthen investor confidence.

NASAA Legislative Priorities

NASAA’s 2011 legislative agenda spotlights five core investor protection issues and urges Congress to:

  1. Support strong implementation of the Dodd-Frank Act;
  2. Reserve regulation for regulators;
  3. Strengthen federal/state collaboration;
  4. Impose a fiduciary duty on all financial professionals when providing investment advice about securities; and
  5. Provide transparency, enhance protections and reserve choice of forum for investors.

Recent Action on Priority Issues

NASAA is engaged in ongoing dialogue with regulators, policymakers, industry professionals and investors to ensure that the implementation phase of the Dodd-Frank Act succeeds in helping investors and strengthening investor confidence.

NASAA’s recent action includes the following comment letters, news releases, testimony and online resources:


Ensuring Appropriate Regulatory Oversight of Broker-Dealers and Legislative Proposals to Improve Investment Adviser Oversight, September 13, 2011

Enhanced Investor Protection After the Financial Crisis, July 12, 2011

Section 914: Investment Adviser Regulation

The SEC staff has recommended three approaches to Improving investment adviser oversight: 1) impose “user fees” on SEC-registered investment advisers that could be retained by the Commission to fund the investment adviser examination program; 2) authorize one or more SROs to examine, subject to SEC supervision, all SEC-registered investment advisers; or 3) authorize FINRA to examine dual registrants for compliance with the Advisers Act.

In its analysis of these options, the report makes a strong case for the user fee option and notes the drawbacks of outsourcing IA regulation to an industry SRO. NASAA shares the SEC staff’s concerns about the disadvantages inherent in allowing industry to regulate itself.

NASAA Statement on SEC Section 914 Study (Jan. 20, 2011)

NASAA Comment Letter on SEC Study of Investment Adviser Regulation (Nov. 22, 2010)

IA Switch Resource Center

Section 913: Fiduciary Duty

The SEC staff has recommended “establishing a uniform fiduciary standard for investment advisers and broker-dealers when providing investment advice about securities to retail customers that is consistent with the standard that currently applies to investment advisers,” and provides an excellent roadmap for the rulemaking to follow.

NASAA Statement on SEC Section 913 Study (Jan. 24, 2011)

NASAA Report to SEC on Regulatory Resources and Effectiveness (Sept. 24, 2010)

NASAA Joint Report on Survey of Investors Attitudes on Fiduciary Duty (Sept. 15, 2010)

NASAA Comment Letter on SEC Section 913 Study (Aug. 30, 2010)

Other Issues:

NASAA Letter to House Financial Services Committee Leadership on H.R. 1070 and H.R. 1082 (June 15, 2011)

NASAA Comment Letter to Financial Services Subcommittee of the House Appropriations Committee on SEC Funding (June 15, 2011)

NASAA Letter to the Senate Banking Committee and House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises in support of the proposed FY 2012 budget for the SEC (March 10, 2011)

NASAA Statement on GAO Financial Planner Study (January 18, 2011)

NASAA Comment Letter to SEC on Accredited Investor Standard (Nov. 4, 2010)

NASAA Comment Letter to SEC on Regulation D Disqualification Requirements (Nov. 4, 2010)

NASAA President Named to Financial Stability Oversight Council (Sept. 23, 2010)

NASAA Statement on Signing of Dodd-Frank (July 21, 2010)

NASAA Testimony Before the Financial Crisis Inquiry Commission (Jan. 14, 2010)

Dodd-Frank Studies

SEC Section 914 Study on Enhancing Investment Adviser Examinations

SEC Section 913 Study on Obligations of Brokers, Dealers and Investment Advisers

SEC Section 919B Study on Investor Access to Information on BDs and IAs

GAO Section 919C Study on Financial Planner Regulation

NASAA in the News

States Urge Congress Not to Water Down Dodd Frank (Reuters)

Let the Lobbying Begin! (Investment News)

Wanted Now: Clear, Consistent Fiduciary Standards for Investment Advice (Washington Post)

Little Victories for State Regulators (Fortune)