North Carolina Banking Institute, Vol. 15, 2011
22 Pages Posted: 23 Feb 2011
In recent years there has been concern about the sufficiency of broker-dealer regulation. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 mandates the SEC to review and evaluate existing regulation and to adopt such rules as may be necessary to enhance existing regulation. Existing SEC and FINRA rule-making addresses broker-dealer conduct, but by and large the regulation has been based on principles and standards rather than voluminous detailed rules specifying prohibited conduct. This article examines the extent to which additional regulation is warranted and whether to continue to rely on principles-based regulation, or whether there should be more explicit rules to heighten broker-dealer standards. The article concludes that although the existing framework for broker-dealer regulation is robust, it could be fine-tuned by possibly adding an express fiduciary duty requirement as well as more specific rule-based prohibitions.
Keywords: Securities, Broker-Dealer, Fiduciary Duty, Investment Adviser
JEL Classification: K22
Suggested Citation: Suggested Citation
Hazen, Thomas Lee, Stock Broker Fiduciary Duties and the Impact of the Dodd-Frank Act. North Carolina Banking Institute, Vol. 15, 2011; UNC Legal Studies Research Paper No. 1767564. Available at SSRN: https://ssrn.com/abstract=1767564