Regulation of Broker-Dealers: Scholarly Sources
Steven Garber, Jeremy Burke, Angela A. Hung & Eric Talley, Potential Economics Effects on Individual Retirement Account Markets and Investors of DOL's Proposed Rule Concerning the Definition of a 'Fiduciary', RAND Report, (Feb. 2015) (responding to claims by several commentators surrounding the Department of Labor's proposal for increasing a broker-dealer's duty when dispensing retirement advice from on of suitability to one of fiduciary duty.
The first claim this paper purports to refute is the claim that broker-dealers' concerns for reputation and intramarket competition limit their ability to act on their conflicts of interest stemming from their compensation mechanism. The authors argue that the weight of evidence suggests this claim is unfounded. The second claim this paper contends with is the claim that the DOL's proposed rule will significantly increase costs borne by retail IRA (Individual Retirement Account) investors, mostly through the increase in direct fees. The authors conclude that there is not enough data to fully analyze this argument, but contend that even if direct fees increase there may be a concurrent decrease is indirect fees. The authors suggest that the ultimate outcome could also be a "some win, some lose" scenario).
Matthew P. Allen, A Lesson from History, Roosevelt to Obama -- The Evolution of Broker-Dealer Regulation: From Self-Regulation, Arbitration, and Suitability to Federal Regulation, Litigation, and Fiduciary Duty (Nov. 1, 2010) (outlining the various calls for reform of broker-dealers' duties to their clients. This article ultimately argues that Congress, not the SEC, should conduct detailed studies when changing te duties of broker-dealers because of the far-reaching implications such changes bring)