Gensler Delivers Remarks on Investor Protection at NASAA Conference

In remarks delivered at the NASAA Spring Meeting & Public Policy Symposium, SEC Chair Gary Gensler highlighted the importance of brokers and advisers complying with standards on care, loyalty, best interest, and best execution. Gensler noted that while changes in technology make investing an option for more people, the marketing tactics, differential pricing, and behavioral prompts change the landscape for many investors. Gensler stated conflicts of interest (does the technology benefit the platform or investor), bias, and the systemic risk that arises from greater concentration on the back end of trading apps (such as market making by wholesalers) can impact investors’ bottom-line. Gensler stated Regulation Best Interest addresses these issues by requiring brokers and advisers to address conflicts between their interest and the investors’ interests, consider reasonably available alternatives, and the costs and risks to investors. He stated the SEC staff is “considering additional bulletins that would further provide their views on each of these three points.” During comments on crypto markets, Gensler stated “recent weeks have highlighted yet again how important it is to protect investors in this highly speculative asset class.”