Displaying items by tag: regulations


The election is far from decided, but the outcome may very well fall into Biden’s favor. With that in mind, it is worth considering how the industry’s regulatory agenda would change were he to become president. He would almost surely replace Jay Clayton as head of the SEC, but the bigger questions are about Reg BI, the new DOL rule, and whether his administration would seek a strong fiduciary standard. Most industry lawyers think Biden would not seek to throw out existing rules and draft entirely new ones. That would take a great deal of work and time. Much more likely, it appears, would be amendments to Reg BI. The infrastructure of the rule is such that simple tweaks could make it much more robust. Chief among those changes would be defining what “best interest” means and changing the approach to enforcement.

FINSUM: If the SEC put a wide-ranging definition of “best interest” in place and changed to stricter enforcement, you would quickly have a much more robust rule.

Published in Wealth Management


Markets and polls are favoring Joe Biden to win the presidency, and markets think there are increasing odds that a blue sweep could occur. So if Democrats take over, what does the regulatory environment look like in wealth management? According to legal and policy experts there are a number of key changes. One big high-level difference between Trump and Biden is that Trump has always favored a principals-based approach to regulation in an effort to lower the compliance burden on companies. Biden would adopt a more rules-based approach with stricter enforcement. Here are five key items that would likely change under a new administration: restarting the debate on Reg BI (i.e. trying to get rid of it or modify it), move towards a rules-based approach in many areas, revive the CFPB, create a public credit reporting agency within the CFPB, and replace SEC commissioner Jay Clayton.

FINSUM: All of this makes perfect sense with what Democrats are signaling. We have another key item to add to the list—killing the new DOL proposal and replacing it with a more robust fiduciary standard either through the SEC or DOL.

Published in Wealth Management
Monday, 20 January 2020 13:32

Investors: Antitrust Regulation is Heating Up


It has been stewing for a while, but antitrust regulation regarding some of the stock market’s largest companies is starting to look like more of a reality. However, it is not in the way one might expect. Trump has long said he wanted to work on anti-trust regulation—with Amazon the frequent target of his ire—but now he is taking steps that actually support big companies and corporate power. The way the administration is going about is through the Justice Department filing many legal arguments in cases where it is not even a party. In this way, it is trying to influence how the courts handle competition cases, and it has generally been pushing patent-holder friendly positions and undercutting lawsuits of other enforcement agencies.

FINSUM: This does not track very well with Trump’s general rhetoric, but it does follow a general Republican economic line. It seems positive for stocks.

Published in Eq: Large Cap

(Los Angeles)

Regulators might be about to really shake up the all important annuities market. The National Association of Insurance Commissioners, which is comprised of state level regulators, has just proposed a new suitability standard for annuities transactions. The new rule would require insurance brokers to act in the best interest of clients when recommending products. The specific wording used says that the insurance salesperson must act “without placing the producer’s or the insurer’s financial interest ahead of the consumer’s interest” and that they must “without placing the producer’s or the insurer’s financial interest ahead of the consumer’s interest”. Speaking about the rule, the NAIC says “It’s in harmony with what the SEC did but goes a little further in providing clarity as to what the conduct standard actually is”.

FINSUM: The annuities market has had some bad behavior so a clean up to give peace of mind to all involved is warranted, but this will likely mean big changes if it comes to pass.

Published in Wealth Management


One of the leading trade bodies of the brokerage industry has just put out an alarming, and frankly logical, warning. SIFMA says that a growing body of regulation is threatening to completely end the brokerage industry as we know it. In particular, SIFMA says the rise of state-based fiduciary rules is likely to lead to the “lowest common denominator” regulatory solution in many states. Instead of trying to navigate a complex network of rules, the solution is simply to say “we do not have brokerage in our state”. Many states may only have advisory accounts, which according to SIFMA will mean "Clients will have one choice they can buy, which in many cases will be buying more services than they wanted and having to pay more than they wanted to”.

FINSUM: So anyone in the industry will realize that trade bodies put out warnings all the time. What makes this different is that it seems highly realistic, which makes it quite troubling. The reality is that for many clients brokerage is the right model, so it needs to be defended.

Published in Wealth Management
Page 1 of 6

Contact Us



Subscribe to our daily newsletter

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…