Reg BI has been in the spotlight recently. With incoming SEC chief being grilled by Congress before potentially being appointed, there is a lot of anticipation about where things might be headed. Some think Gensler will move quickly to alter Reg BI, while others (including us), think that he might move slower because of potentially more pressing issues like meme stocks and bitcoin. However, one change that may come quickly is a simple but important one: changing the regulation’s name. There is a loud call for the SEC to change Reg BI’s name because many say it is “grossly misleading” since it is not a true fiduciary rule. Gensler could potentially make this change much more easily than actually modifying the rule, so it makes sense this could be an immediate measure to appease critics.
FINSUM: What we find interesting here is that calls to change the name are not just coming from fiduciary rule advocates and the like, but also from brokers. The latter seem to be having some trouble with the clients thinking they are fiduciaries when they aren’t, which can then lead to big blowups/lawsuits.