Massachusetts’s Secretary of the Commonwealth William Galvin signed off Friday on new regulations that would impose a uniform fiduciary conduct standard on broker-dealers, agents, investment advisors and investment advisor representatives when dealing with their customers and clients in the state.

“I am proposing this standard because the SEC has failed to provide investors with the protections they need against conflicts of interest in the financial industry with its ‘Regulation Best Interest’ rule,” Galvin, the state’s chief securities regulator, says in a statement.

“My Office has seen firsthand the serious financial harm that investors and savers have suffered as a result of conflicted financial advice,” he adds. “Investors must come first.”

A hearing on the proposed regulations, which were filed Friday with Galvin’s Publications & Regulations Division, will be announced at a later date, according to an announcement.

The proposed fiduciary conduct standard would require financial professionals to treat their customers and clients with utmost care and loyalty.

William Galvin

Financial recommendations and advice would be required to be based on what is best for the customers and clients, without regard to the interests of the broker-dealer, advisory firm and personnel. The conduct standard is based on the common law fiduciary duties of care and loyalty.

The proposed changes to existing regulations are expected to increase accountability in the financial industry and protect investors by subjecting investment advice to a true fiduciary standard, according to the announcement.

Municipalities and pension plans would receive the full protection of the heightened conduct standard, along with individual investors.

In August last year, Galvin wrote in a comment letter to the SEC: “If the Commission does not adopt a strong and uniform fiduciary standard, Massachusetts will be forced to adopt its own fiduciary standard to protect our citizens from conflicted advice by broker-dealers.”

In June this year, the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth sought comments on its proposal to apply a fiduciary conduct standard to broker-dealers, agents, investment advisors and investment advisor representatives when dealing with their customers and clients. That comment period ended in July.

Nevada and New Jersey are also working on their own versions of fiduciary rules for the financial advice industry.

Tens of thousands of brokers and registered representatives stand to be affected by these pending state initiatives. There were 4,949 broker-dealer branches in New Jersey, 3,625 in Massachusetts and 1,278 in Nevada as of 2017, the latest data released by self-regulator Finra. Combined, those three states made up 6% of the total broker-dealer branches in the U.S. in 2017.

Meanwhile, seven states — New York, California, Connecticut, Delaware, Maine, New Mexico and Oregon — and the District of Columbia have filed a complaint for declaratory and injunctive relief against the SEC and Clayton in New York because of Reg BI.

This was originally published as a breaking news article on November 29.