Adoption of Amendments to Fiduciary Conduct Standard Regulations
Effective March 6, 2020, the Massachusetts Securities Division has adopted amendments to 950 Mass. Code Regs. 12.200 as they relate to the standard of conduct applicable to broker-dealers and agents. The adopted amendments to the regulations will apply a fiduciary conduct standard to broker-dealers and agents when dealing with their customers, at 950 CMR 12.207. Failure to adhere to the fiduciary standard of utmost care and loyalty will be deemed a dishonest or unethical practice under M.G.L. c. 110A, § 204(a)(2)(G). In addition, the regulations will revise certain paragraphs in 950 CMR 12.204 to make clear that the existing suitability standard still applies to any relationships or transactions expressly excluded from the fiduciary standard. The Division will begin enforcing the amended regulations on September 1, 2020.
The amendments were proposed on December 13, 2019. The Division accepted public written comments until January 7, 2020 and held a public hearing on January 7, 2020. Below are links to the Adopting Release and an unofficial copy of the amended regulations.
The Division thanks all those who submitted written comments and testified at the hearing for their thoughtful and valuable feedback.
Amended Regulations (PDF) provides an unofficial version of the amended regulations
Solicitation of Comments on Fiduciary Conduct Standard Proposal (December 13, 2019)