Alert July 27, 2010

SEC Requests Comment on Adviser and Broker-Dealer Standards of Care for Retail Customers

The SEC published a request for public comment to assist it in preparing a study examining the legal and regulatory standards of care for broker-dealers, investment advisers and their personnel when providing personalized investment advice and recommendations about securities to retail investors.  The study is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”).  The SEC must submit a report on the study to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services no later than January 21, 2011.  The Dodd-Frank Act also gives the SEC express authority to address the foregoing standards of care, but does not mandate rulemaking based on the study.  Comments must be submitted no later than 30 days after publication of the SEC request for comment in the Federal Register.