* Brokers should be bound by fiduciary standards-Aguilar
* Senate banking panel backed down from stronger rules
WASHINGTON, March 26 (Reuters) - A top U.S. securities regulator lamented weak broker rules being contemplated by the U.S. Congress and said brokers who provide financial advice should be required to act in their client’s best interest.
“It makes sense for investors to expect that all securities professionals providing them with advice would be subject to the same obligations,” Securities and Exchange Commission member Luis Aguilar said on Friday.
Aguilar is one of five SEC commissioners who make decisions on federal securities rules.
Senators had been considering requiring brokers to adhere to the higher fiduciary standard that investment advisers are subjected to but have backed down from that plan.
A bill passed by the Senate Banking Committee on Monday simply requires the SEC to study existing standards.
“I see no need to study the appropriate obligation for investment advisers,” Aguilar said in prepared remarks to an investment adviser conference in Washington.
“We already have a strong, workable standard ... and I would not support any attempt to weaken it,” he said.
Currently brokers are required to follow so-called suitability standards, which require them to ensure that any financial product is suitable for a client. In contrast, investment advisers are bound by so-called fiduciary duties to put their clients’ best interests first. (Reporting by Rachelle Younglai; Editing by Steve Orlofsky)
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