Sources Say Johnson Fiduciary Amendment to Be in Dodd's Financial Services Reform Bill

Washington insiders say that Senator Christopher Dodd (D-Connecticut), chairman of the Senate Banking Committee, plans to release a draft of his financial services reform bill on February 25, and that it will include Senator Tim Johnson’s (D-South Dakota) amendment which asks that the Securities and Exchange Commission (SEC) conduct a study “to determine appropriate obligations” of advisors and brokers, and then to issue a rule after such a study is completed.

The insiders say that Johnson’s amendment will replace the fiduciary language that was in Dodd’s original discussion draft of his bill; that original language would have required that brokers be held to the same fiduciary standard as investment advisors.