The House Financial Services Committee has passed H.R. 3817, the Investor Protection Act, by a vote of 41-28.
The legislation is part of a broader effort to modernize America’s financial regulatory system and though aimed at the securities market, does have ramifications for insurance producers. The bill gives the Securities and Exchange broad new enforcement powers and stipulates that all financial intermediaries who provide advice have a fiduciary duty toward their customers.
“In order to maintain a sound economy, we must improve investor protection and confidence,” Rep. Paul E. Kanjorski (D-PA), chairman of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises and sponsor of the bill said in a statement. “The Investor Protection Act aims to achieve these goals while also improving enforcement powers at the U.S. Securities and Exchange Commission and implementing a fiduciary standard for broker-dealers and investment advisers to ensure that customers’ interests are at the forefront of investment recommendations. Our financial system has failed far too many investors for far too long and we must change course. I believe this bill has the capabilities to address many of the problems we continue to face.”
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