New Jersey Attorney General Gurbir Grewal and the Bureau of Securities within the Division of Consumer Affairs on Monday proposed a new rule to strengthen investor protections in the state by requiring all investment professionals registered with the Bureau to place their customers’ interests above their own when recommending securities or providing investment advice.
The proposed rule, published Monday in the New Jersey Register, requires all registered financial services professionals to act in accordance with the fiduciary duty to their customers when providing investment advice or recommending to a customer an investment strategy, the opening of or transfer of assets to any type of account, or the purchase, sale or exchange of any security. Conduct falling short of this fiduciary duty would, under the proposed rule, constitute a “dishonest and unethical practice.”
New Jersey would be among the first states to adopt a uniform fiduciary standard, one of the many financial reforms widely sought by consumer advocates and many members of the financial industry after the 2008 financial crisis.
With this proposed rule, New Jersey once again reaffirms its commitment to providing its citizens with the protections they deserve when federal regulations fall short.
“Today, we are strengthening the integrity of New Jersey’s financial services industry by proposing some of the strongest investor protections in the nation,” said Gov. Phil Murphy. “At a time when the federal government is undermining the consumer protections implemented in the wake of the 2008 economic crash, we are committed to ensuring our residents and families are protected from predatory financial practices.”
“If the federal government won’t act to protect investors, then we will,” said Grewal. “Today, we are fulfilling Gov. Murphy’s promise to strengthen financial protections for New Jersey residents. The rule we’re proposing will provide important safeguards for New Jersey’s families when they invest, save, and plan for their future.”
There will be a 60-day public comment period during which stakeholders have an opportunity to submit written comment on the proposed rule.