The trade associations signing the letter include theU.S. Chamber of Commerce, the Securities Industry and FinancialMarkets Association and the American Securities Association.(Photo: Shutterstock)

(Bloomberg) — With the ink barely dry on new federal rules governing brokerconflicts, the industry is moving to quash stricter regulationsthat are now popping up at the state level.

One initial battleground is New Jersey, where a group of 11financial trade associations Friday plan to ask the state'ssecurities regulator to reconsider its conduct proposal in light ofaction by the Securities and Exchange Commission last week.The SEC measure, requiring brokers to act in the “best interest''of clients, was derided as a Wall Street giveaway by consumeradvocates.

Related: Will Reg BI preempt state fiduciaryrules?

“The creation of overlapping, duplicative or potentiallyconflicting requirements could create serious issues for theindustry'' and would “likely lead to increased investor confusionand undermine the intent of federal law,” the trade groups wrote ina letter.

The trade associations signing the letter include the U.S.Chamber of Commerce, the Securities Industry and Financial MarketsAssociation and the American Securities Association.

The fight over setting a code of conduct for brokers has beengoing on in Washington for more than a decade. The SEC'sregulation, approved on a 3-1 vote on June 5, impacts tens ofmillions of investors who buy stocks and bonds as they save forretirement, new homes and college.

Still, much remains unsettled. While the SECregulation was widely lauded by brokers, pro-investorgroups and Democratic politicians said it wouldn't increaseprotections and, in fact, would allow some shady industry practicesto continue. Many of the opponents are now urging states to dotheir own, stricter rules.

Along with New Jersey, Nevada is also considering imposing itsown requirement on brokers and other states are expected to jumpin. Those proposals would generally impose a tougher code ofconduct, known as a fiduciary duty.

In their letter Friday, the industry groups also argued that theNew Jersey plan conflicts with federal law — a reminder thatwhatever the outcome, the issue is likely to wind up beingchallenged in court.

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