Displaying items by tag: best interest rule

(Washington)

The Trump administration has slowly but surely exerted its influence on the SEC. After two and half years, the changes are reaching their zenith. The last Democrat at the SEC is set to step down later this year. He is technically entitled to stay through June 2020, but is likely to leave before the autumn, when he is set head back to academia. The departure will open the door to a more conservative appointment. It would also mean there are only three commissioners left at the SEC, two of whom are Republicans, giving them an advantage in SEC matters.

FINSUM: This could have all sorts of ramifications for policy, including the best interest rule. We expect this may have some significant impacts on the the BI rule plays out.

(Washington)

In what we think might be the worst case scenario for the industry, it is looking like the DOL and SEC are in a full scale partnership to regulate the wealth management industry. With the DOL’s announcement that it is taking another crack at the fiduciary rule, and its guidance that it would issue a new rule in September 2019 (the same month the SEC says it will debut an updated best interest rule), many insiders now expect that the DOL and SEC are working together to craft a comprehensive package of fiduciary regulations. According to Fred Reish, a top industry lawyer, “It appears that DOL and the SEC have coordinated their agendas so that the SEC's rules can be incorporated into a new exemption for prohibited transactions resulting from non-discretionary fiduciary advice”.

FINSUM: Some think this is a good sign, but more partnership between the regulators means a more diverse set of rules to adhere to. Further, there will inevitably be significant gaps between the different agency rules, leaving a lot of doubt and grey area, which causes headaches for anyone trying to play by the rules.

(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?