Displaying items by tag: SEC

(Washington)

In what arrives as fairly shocking and quite alarming news, the DOL rule is coming back. After being effectively killed seven months ago, the DOL rule had all but disappeared. However, in an unpredictable turn of events, the DOL has announced it is working on a new version of the rule that will be debuted in 2019. The DOL released in its fall agenda that is was working on an updated rule in light of the 5th circuit court’s ruling, and that this would be debuted in Fall 2019. One prominent industry lawyer comments that “With both DOL and the SEC working on investor protection rules (and with both agencies targeting the same deadline), this hints that the two agencies may be working together to develop coordinated rules to protect American savers”.

FINSUM: A new DOL rule? Just when everyone thought we were past it! We expect this will be a toned down rule compared to the first version, however.

(Washington)

In what seemed an attention-grabbing and worrying story, it appears that the DOL and SEC rules are merging into some sort of hybrid, but not in the way you might think. Despite the DOL rule being effectively dead due to a court ruling, the DOL seems to be pressing ahead and is planning to modify its Conflicts of Interest rule to mirror the SEC’s new language in its BI rule. “It’s the DOL and the SEC trying to end up in the same place in terms of regulation”, says a senior policy official.

FINSUM: While this is not as worrying as if the SEC were trying to mirror the DOL, it does seem like the DOL is pressing ahead with the regulation. Perhaps we have not heard the last of the fiduciary rule?

(Washington)

The SEC received over 6,000 comment letters in its public comment period for its new best interest rule. The regulator is currently reviewing those, but the big question is what is the rule’s implementation timeline? A top director at the SEC recently declined to comment on a timeline, saying “We are in the process of going through comments to see what changes if any we should be recommending”, but refused to give a date.

FINSUM: The anecdotal evidence and chatter we are hearing is that the SEC is going to try to move quickly to finalize and implement this rule. Stay tuned.

(Washington)

In a sign of just how wide-reaching the coming SEC Best Interest rule truly is, FINRA has just acknowledged that the Suitability Rule might be on the chopping block. FINRA’s Suitability Rule requires that brokers choose a product suitable for their client, but is a weaker standard than the proposed BI rule. “If [Regulation Best Interest] is adopted, then we would need to look at our rule set to see if any changes are appropriate … For example, is our suitability rule appropriate? But that is down the road. We need to see how Reg BI is adopted”, says Robert Cook, the CEO of FINRA.

FINSUM: This is not really a surprise, as the BI rule would basically make the Suitability Rule redundant. However, it is certainly a wake up call that things are changing quickly.

(Los Angeles)

In a turn of events that stretches the boundaries of our understanding, Elon Musk took to Twitter yesterday to mock the SEC. The move comes in the same week that the CEO agreed to settle a suit with the regulator over his misleading tweets this summer. Musk tweeted yesterday afternoon that “Just want to [say] that the Shortseller Enrichment Commission is doing incredible work … And the name change is so on point!”. Legal experts say the tweets jeopardize his potential settlement the SEC as they violate specific clauses of the agreement.

FINSUM: We know he is a defiant character, but this kind of behavior seems to show extremely poor judgment, if not borderline mental instability.