SEC

Jay Clayton’s written statement on standards of conduct rules

Chairman Clayton’s statement on today’s standards of conduct package can be found here.

David Grim to Law360: Will the SEC raise preemption in today’s best interest rules?

The time has come for the SEC’s new standards of conduct package

The public hearing begins at 10 am EDT today and can be streamed.

DOL Assistant Secretary confirms the DOL will issue a regulation that “aligns” with Regulation Best Interest

SEC to unveil final broker-dealer standard of conduct package on June 5

The SEC just announced that it will consider adoption of Regulation Best Interest and the other parts of the standards of conduct rulemaking package at an open meeting scheduled for 10 am on June 5.

We are expecting:

  • A standard of conduct for broker-dealers and their associated natural persons when making a recommendation to a retail customer of any securities transaction or investment strategy involving securities.
  • The SEC to consider whether to require registered investment advisers and registered broker-dealers to provide a brief Form CRS relationship summary to retail investors, as well as whether to publish an interpretation of the standard of conduct for investment advisers.
  • The SEC will consider whether to publish a Commission interpretation of the “solely incidental” prong of section 202(a)(11)(C) of the Investment Advisers Act of 1940, which provides that the term “investment adviser” does not include any broker or dealer whose performance of investment advisory services is solely incidental to the conduct of his business as a broker or dealer and who receives no special compensation therefor.

The DOL, meanwhile, which by all accounts is coordinating with the SEC, still plans to release its own guidance that will likely pair with Reg BI. We expect the DOL guidance Q3 or Q4 this year.

How the states are trying to revive the DOL fiduciary rule

Wealth Management Magazine just ran a story on how the states are attempting to revive the DOL Fiduciary Rule in their own image. As part of my interview, I say: “To me, there’s no question that the Department of Labor fiduciary rule is a bit of the ideal paradigm in terms of governance (for these states).” This is true, but the DOL rule appears to also be a litmus test for some of the states in evaluating Regulation Best Interest (Reg BI) and their own rules. As some states try to channel the DOL Fiduciary Rule, Jay Clayton and Alex Acosta are, by all, accounts, coordinating on a June unveiling of the SEC Standards of Conduct package with a  proposed DOL exemption and some guidance (i.e., not a new rule on when one becomes an investment advice fiduciary under section 3(21) of ERISA) to follow.

Another Reprise: Look for DOL guidance late summer/fall that complements a final SEC standards of conduct rulemaking package, particularly Reg BI

Reprise: Is a final Reg BI “imminent”?

Report: Reg BI likely coming out this month