Displaying items by tag: SEC

(Washington)

The Fiduciary Rule is supposed to be dead, right? Well that seems to be more of a myth than reality, as the rule has taken on a life of its own in many forms. Not only is the DOL planning to issue a second version of the rule in 2019, but many states are now creating out their own fiduciary rules. For instance, New Jersey is poised to become one of the first states to adopt a uniform fiduciary standard. Many others already have various fiduciary standards that were put in place after the demise of the first rule. Those that have or are considering changes incude Nevada, Connecticut, California, South Carolina, and South Dakota.

FINSUM: There is a definitely a strong fiduciary undercurrent slowly pushing across the country. However, some states have definitively ruled that a fiduciary relationship does not exist between a client and broker, including New York.

(Washington)

One of the big concerns advisors should have right now is how the newly Democratic House might affect fiduciary regulation. Most will be aware that the SEC Best Interest rule was much lighter touch than the first version of the DOL rule. However, on top of the DOL rule making a return in 2019, the SEC could be derailed by the House. Maxine Walters, a staunch fiduciary advocate, will now head the House Financial Services Committee and it seems liklye the House will call SEC head Jay Clayton in for a questioning session where they press him to add a fiduciary element to the current Best Interest rule.

FINSUM: The exact path to derailing the SEC rule is still a little unclear. Because Trump has already appointed the heads of the relevant agencies, the House has an unclear ability to get in the way.

(New York)

The whole Fiduciary rule saga seemed to be over earlier this year, but now that couldn’t be further from reality. While the DOL seemed to gracefully fade from the limelight in March, the truth is that the rule is a “sleeping giant’ according to one industry lawyer. That giant has now woken up, as the DOL is set to release an updated version of its rule in September of next year. The big question is how the SEC rule will be affected, and whether the rules will work in tandem. In either case, advisors and brokers seem likely to see much more regulation within a year or so.

FINSUM: The other big question is whether the political changes in Washington mean the SEC rule might be scuttled in some way. We sense some big changes happening.

(Washington)

One aspect of last week’s midterms that is not being discussed much, but has critical relevance for the wealth management industry is that fact that statehouses across the country swung from red to blue. Democrats won control of several state legislatures and governor seats across the nation. The impact on advisors could be large, as many more states are now much less constrained in their ability to urge for, and issue, their own fiduciary rules.

FINSUM: The massive “blue wave” did not materialize, but the gains were substantial enough that they could create some serious headaches for advisors that are in swing states. Perhaps even more concerning is how the blue House might push for a renewed federal fiduciary rule.

(Washington)

In what could be a very worrying sign for the industry, it is being reported today that the SEC may be inserting the word “fiduciary” in its new best interest rule. The word had been conspicuously absent, much to the chagrin of DOL rule advocates. However, the SEC’s own advisory committee now says the word should be included. The SEC’s Investor Advisory Committee saw a majority vote for the inclusion of the word and a fiduciary standard to be applied, something the SEC had diligently avoided until now. The Committee voted 16-3 in favor of the changes.

FINSUM: This seems very likely to now be included in the new rule. Does that mean it should no longer be called the BI rule, but the SEC Fiduciary Rule?