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Ropes & Gray Attorneys Quoted Extensively on SEC’s Proposed Standards of Conduct for Investment Advisers and Brokers

Practices: Investment Management, Private Funds, Hedge Funds, Asset Management, Investment Management Compliance, Investment Advisers

On April 18, the SEC proposed Regulation Best Interest and standards of conduct for broker-dealers and investment advisers. The proposals were covered extensively in the media with comments from Ropes & Gray attorneys in a number of pieces.

“The SEC's votes demonstrate a willingness to move forward with a package of three important proposals,” investment management counsel David Tittsworth outlined in International Financial Law Review. “A lot of industry participants, both broker-dealers and investment management people, believe the SEC is in the best position to develop rules in this area,” Mr. Tittsworth stated in Fund Action/Compliance Reporter. In Law360, Mr. Tittsworth notes that “The SEC needs more clarity around what this is. How is it different from the suitability that brokers are subject to right now? Those are major issues to me,” also adding in InvestmentNews that the proposals are going to be highly controversial.

“In some ways it’s more broad-based than the DOL fiduciary rule, and in some ways it doesn’t go as far,” according to investment management partner Paulita Pike, partner at Ropes & Gray in Fund Directions.

“I would consider this a softer, interpretative approach,” Pike said. However, while the industry will probably welcome the rulemaking’s flexibility compared to the DOL rule, it also invites further questioning, she noted. Fund boards may want to ask management teams to re-examine their litigation risk as a result of the SEC’s new proposals, Pike said in a follow up piece by Fund Directions.

Comments by Mr. Tittsworth were also featured in ThinkAdvisor, Ignites, Financial Advisor IQ and FundFire. Additionally, The Harvard Law School Forum on Corporate Governance and Financial Regulation published an article by Mr. Tittsworth based on a Ropes & Gray publication by Mr. Tittsworth, private investment funds partner Jason Brown, investment management partner George Raine, and hedge funds partner Joel Wattenbarger, examining the SEC’s proposed standard of conduct for investment advisors.

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