The U.S. Chamber of Commerce (“Chamber”) Center for Capital Markets Competitiveness submits these comments on the proposal by the Securities and Exchange Commission (“Commission” or the “SEC”) to create new rules under the Securities Exchange Act of 1934 (“Exchange Act”) and the Investment Advisers Act of 1940 (“Advisers Act”) to address conflicts of interest associated with a broker-dealer or investment adviser’s use of a “covered technology” when interacting with investors (the “Proposal”).
The SEC should abandon this Proposal. As explained in detail throughout this letter, the Proposal is entirely unworkable, fails to consider existing regulation that governs investment recommendations made to retail investors, and is based upon false premises and assumptions about the use of technology by broker-dealers and investment advisers. It is also our belief, as underscored in the recent joint trade association letter signed by the Chamber, that the Proposal rests on a foundation that lacks authority under the Exchange Act and Advisers Act.