On July 26, MFA submitted a letter to the Massachusetts Securities Division in response to proposed regulations on the fiduciary standard of conduct for investment advisers and broker-dealers. In the letter, MFA explains that it is not necessary or appropriate to alter the existing fiduciary standard for investment advisers with respect to institutional and sophisticated clients to address concerns regarding retail investors. If applied to such investment advisers, the proposal would introduce additional costs and burdens that negatively impact the investment activities of sophisticated investors, which include public and private pension funds, endowments and other institutions. The letter also expresses concern that the proposal would subject advisers to a new and different standard inconsistent with the existing standard, and introduce a state-by-state approach that would cause uncertainty and confusion for both investors and investment advisers.
The letter recommends that the Division either limit the proposal’s application to direct retail clients or customers of investment advisers and/or broker-dealers, with clear definitions of retail and non-retail, or not proceed with the proposal.