SIFMA Comments on New Jersey Fiduciary Rule Proposal

Washington, D.C., June 14, 2019 – In a comment letter submitted today in response to New Jersey’s proposed rule to create a state fiduciary standard, SIFMA expressed strong concern with the approach taken and urged the state to defer to the new nationwide best interest standard finalized by the Securities and Exchange Commission (SEC) last week, which addresses the investor protection concerns and goals stated by New Jersey policymakers.

“To best protect investors and avoid investor confusion, the optimal approach is to defer to the uniform, nationwide, heightened, best interest standard for broker-dealers which is embodied in the SEC’s now final Reg BI,” SIFMA wrote in the letter. “A state-by-state approach, on the other hand, would result in an uneven patchwork of laws that would be duplicative of, different than, and possibly in conflict with federal standards. It would also heighten investor confusion. We urge the Bureau to pause its rulemaking process, review Reg BI, and reevaluate its proposal before deciding whether it is necessary to proceed with an additional state regulation.”

“The proposal would generally incentivize firms to curtail their brokerage services in New Jersey. As a result, many New Jersey investors would lose access to valuable brokerage services and advice,” the letter concludes. “Moreover, many of these same investors, particularly middle-class Americans, would not qualify for fee-based accounts, and so would lose access to advice altogether.”

The letter also highlighted the potential broader negative consequences for New Jersey given the industry footprint in the state. “The finance and insurance industry has roughly 200,000 employees in the state of New Jersey and accounts for almost 5% of all employment in the state. Every dollar spent in the securities industry in New Jersey generates an additional $1.22 for the state economy, and every job in the securities industry generates an additional 1.34 jobs statewide,” the letter stated. “The proposal would represent a fundamental change in the way the securities sector operates in the state and would fundamentally alter its relationship with the millions of investors within the state.”

SIFMA’s full comment letter detailing these concerns and others, as well as recommended changes, can be found here.

SIFMA also joined with several other financial services trade associations in a letter echoing these concerns which can be found here.


SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit