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Nevada Secretary Of State Unveils Proposed Broker-Dealer Fiduciary Rules

NRS 628A.020 imposes a fiduciary duty on financial planners.  In 2017, the Nevada legislature enacted legislation prohibiting broker-dealers and sales representatives from violating the fiduciary duty imposed by NRS 628A.020.  NRS 90.575(1).  This same legislation authorized the Administrator of the Nevada Securities Division, Office of the Secretary of State to adopt regulations relating to this fiduciary duty.   Earlier this week, the Administrator issued proposed rules for public comment.

The proposed rules include several exemptions, including one with the interesting appellation of "Episodic Fiduciary Duty Exemption".  The Administrator also proposes to arrogate to itself the authority to adopt by order any fiduciary duty related rule, exemption, form or prohibition approved by the Securities and Exchange Commission for application to broker-dealers and other securities professionals so long as the adoption does not "materially diminish" the fiduciary duty set forth in NRS Chapters 90 and 628A.

Nevada' action is noteworthy in light of the SEC's proposal to maintain separate regulatory standards for broker-dealers and investment advisers.

The comment period for Nevada's proposal ends March 1, 2019.  Comments should be addressed to Diana Foley, Nevada Secretary of State's Office Securities Division, 2250 Las Vegas Boulevard North, Suite 400, North Las Vegas, NV 89030.

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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...