Bloomberg Law
Free Newsletter Sign Up
Login
BROWSE
Bloomberg Law
Welcome
Login
Advanced Search Go
Free Newsletter Sign Up

SEC’s Broker Conflict Rule Faces Court Challenge From Advisers (1)

Sept. 11, 2019, 2:22 PMUpdated: Sept. 11, 2019, 3:34 PM

The SEC’s new conflict-of-interest rule gives broker-dealers a competitive advantage, an investment adviser network and one of its members said in lawsuit filed in a New York federal court.

The rule imposes a lower standard for brokers and “reduces the incentive” for them to register as advisers and become network members, according to a complaint filed against the Securities and Exchange Commission in the U.S. District Court for the Southern District of New York Sept. 10.

Broker-dealers increasingly perform similar functions to advisers without facing the same stringent regulations, the complaint said. The 2010 Dodd-Frank Act directed the SEC to ...