Burr & Forman

06.2.2017   |   Blog Articles, Fiduciary Rule, Securities Litigation

SEC Returns to the Fiduciary-Rule Arena

On June 1, new SEC Chair Clayton returned the SEC to the arena in the policy debate surrounding the DOL’s Fiduciary Rule.  Clayton’s public statement responded to a direct invitation for SEC participation by DOL Secretary Acosta in his Wall St. Journal op-ed last week.  Acosta used the article to announce there would be no further delay in the DOL Rule, despite continuing study.

In a masterful understatement without apparent irony, the Chair noted:  “The SEC has been reviewing this area for some time, including through the RAND study of investor perspectives commissioned in 2006, the Dodd-Frank Act Section 913 staff study conducted in 2010-2011, and, most recently, a solicitation of data and other information in 2013.”

Those studies are stale, so the Commission is asking for input from the retail investing public on a number of issues, including:

  1. Retail-investor confusion among different providers of investment advice.
  2. Identifying and addressing potential conflicts of interest.
  3. Retail-investor perceptions and expectations regarding new technology, including robo-advisers and fintech.
  4. Trend toward fee-based instead of commission-based advice: Drivers, expectations, effects.
  5. Costs and benefits of multiple standards of conduct (given limited reach of DOL Rule).
  6. Different responses among market segments?
  7. Disclosure or conduct standards or both? All-at-once or gradually?
  8. International norms?

Commenters can use a Webform (here:  https://www.sec.gov/cgi-bin/ruling-comments ) or dedicated email address (here:  rule-comments@sec.gov ) to submit their thoughts.

The Chair’s public statement is here:  https://www.sec.gov/news/public-statement/statement-chairman-clayton-2017-05-31.

Thomas K. Potter, III (tpotter@burr.com) is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Tom is licensed in Tennessee, Texas and Louisiana. He has over 30 years’ experience representing financial institutions in litigation, regulatory and compliance matters. See attorney profile.

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