Will "Best Interest" Preempt Fiduciary Duties?

Last month, the Securities and Exchange Commission proposed to established a standard of conduct for broker-dealers when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer.  If adopted as proposed, broker-dealers will be required to act in the "best interest" of the retail customer at the time a recommendation is made "without placing the financial or other interest of the broker-dealer ahead of the interest of the retail customer".  This standard would also apply to natural persons who are associated persons of a broker-dealer. 

The rule proposal is Brobdingnagian, a towering 400 pages and 726 footnotes! Consequently, I have not yet had an opportunity to read it thoroughly, or even not so thoroughly. Nonetheless, I have scanned it to see how the SEC proposes to deal with state broker-dealer standards of conduct.  The SEC does acknowledge that "courts interpreting state common law have imposed fiduciary obligations on broker-dealers in certain circumstances." The SEC also asks whether the proposed federal standard adequately accounts for these additional protections.  I did not see any mention in the proposal of whether the SEC's best interest standard would preempt either state common law or statutory standards.  Whether the SEC can or should preempt higher state law standards of conduct is, however, a important question that should not be left unaddressed.