Can State Laws One-Up SEC’s Regulation Best Interest?

By David Starr, Joel Oswald, and Leah Kim

On June 5, 2019, the SEC adopted its controversial Regulation Best Interest to change the current standards of conduct for broker-dealers.  Before the adoption, several states had released draft regulations or legislation that would impose more stringent standards on broker-dealers than the standards required under SEC’s Regulation Best Interest.  Regulation Best Interest does not explicitly address whether it would preempt state law and merely states that the preemption of state law would be determined in future judicial proceedings.  Therefore, we have authored an article entitled Can State Laws One-Up SEC’s Regulation Best Interest to describe the approach that courts have traditionally taken in deciding the preemption issues and the general federal securities law limitations that govern state authority in this area.  The article was published in Law360 on November 13, 2019.

Read the full article here.