Law360, New York (July 27, 2010) -- The Dodd-Frank Wall Street Reform and Consumer Protection Act — passed by Congress on July 15, 2010, and signed into law by President Obama on July 21, 2010 — is the culmination of years of debate and negotiation over the scope of reform in the financial services industry.

One of the most contentious topics debated by Congress was whether to adopt a uniform and enhanced fiduciary standard to be applied to all relationships between broker-dealers and their retail clients. Despite immense pressure to adopt such a standard, the act falls well short of imposing a uniform standard.

Prior to passage of the act, U.S. Securities and Exchange Commission Chairwoman Mary Schapiro stated: “I have long advocated such a uniform fiduciary standard and I am pleased the legislation would provide us with the rulemaking authority necessary to implement it.”

The SEC is authorized by the Dodd-Frank Act to conduct a study that would permit the SEC to adopt rules to impose the same fiduciary standard of care on broker-dealers who provide “personalized investment advice” as is currently required of investment advisers under the Investment Advisers Act of 1940.