The Government Finance Officers Association (GFOA), which supports the efficient and effective functioning of capital markets, is concerned about the growing trend toward weakening public investor protections. Various legislative, regulatory and voluntary initiatives are underway that seek to reduce or eliminate the protection currently provided by existing laws, regulations and industry standards to state and local government investors, including public pension systems as well as state and local government employees who, in some cases, individually direct their own pension fund investments.

GFOA Position

The GFOA opposes these efforts to reduce existing protections for public investors and specifically opposes any attempts to diminish the existing standard of responsibility on the part of broker-dealers to make suitable recommendations to state and local government investors or to place the burden for such recommendations on the state or local government investor. The GFOA further opposes federal efforts to preempt state authority for investor protection by superseding state securities and investment adviser laws and regulations, attempts to dilute the existing investor protection authority granted to federal regulators, and the repeal of statutes intended to provide material information to state and local government investors.

• Publication date: May 1996