Show-Me State Times

A federal court in Missouri has struck down two rules that imposed additional regulatory requirements on the state's financial institutions.

On Wednesday, August 14, 2024, the court ruled in favor of the Securities Industry and Financial Markets Association (SIFMA) in its challenge to two new disclosure and consent rules. The Missouri Chamber of Commerce and Industry filed an amicus brief supporting SIFMA and played a significant role in urging the court to block what it termed as bureaucratic overreach.

The rules, enacted by Missouri Secretary of State Jay Ashcroft, mandated additional disclosures for financial professionals and required them to obtain their customer's written consent when considering "a social objective or other nonfinancial objective."

However, the court stated that Ashcroft's rules are preempted by federal law. Additionally, they were deemed too vague and found to violate investment advisors' right to free speech.

"We applaud the ruling and are grateful that the courts stepped in to block these mandates that would have placed an unnecessary burden on investment firms – small and large – doing business here in Missouri," said Kara Corches, interim president and CEO of the Missouri Chamber. "The Missouri Chamber will always defend free enterprise. When government attempts to reach into business affairs, our position is simple – let business decide. Every industry is different, and we believe employers know best how to run their own business."