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Clayton: SEC Won’t Supplant DOL’s Fiduciary Rule

October 25, 2017

While the SEC doesn’t plan to “supplant” the Department of Labor’s fiduciary rule, an SEC rule isn’t a priority for the nominees to the commission’s two open spots, ThinkAdvisor reports.

At a Sifma conference Wednesday, when asked whether the SEC would supplant the DOL’s best-interest standard, SEC chairman Jay Clayton said the commission has to “respect” the separate process at the Labor Department, the publication reports. Nonetheless, Clayton said both the agencies and state regulators have to cooperate, adding “at the end of the day we’re all going to operate in this” fiduciary space, ThinkAdvisor writes.

The DOL’s fiduciary rule, which purports to force retirement account advisors to put clients’ interests first, went into partial effect in June. Many opponents of the DOL rule argue that the SEC should roll out a uniform best-interest standard instead. Earlier this month a U.S. House of Representatives panel passed a bill to repeal the DOL’s rule and hand over enforcement of advisor standards to the SEC and Finra. The DOL, meanwhile, will likely delay the final implementation of the rule by a further 18 months and has already eased some of its provisions.

But the nominees to fill the two open seats on the SEC don’t consider an SEC fiduciary rule a top priority, ThinkAdvisor also reports. In yesterday’s nomination hearings in front of the Senate Banking Committee, Hester Peirce and Robert Jackson put executive compensation, cybersecurity and oversight of Finra ahead of the fiduciary rule in terms of priorities, according to the publication. Nonetheless Jackson, a Democrat, said the commission “should have an important role in the development of these fiduciary standards,” ThinkAdvisor writes. Peirce, a Republican, said cooperation between the SEC, the DOL and the states is important, but that she was “glad that calmer minds have prevailed” in regard to the DOL’s rule, according to the publication.


Meanwhile, a watchdog group launched earlier this year is pressuring the DOL to release information about its decision to delay the fiduciary rule, Reuters writes. American Oversight, which is staffed by lawyers from president Barack Obama’s administration, filed a lawsuit in the U.S. District Court for the District of Columbia seeking documents about the DOL’s decision-making process in rolling back the fiduciary rule and overtime pay regulations, according to the newswire. The group says the DOL failed to release the paperwork requested in July through a suit filed in the same court, Reuters writes. The Freedom of Information Act dictates agencies normally have 20 days to respond to such requests, according to the newswire.

By Alex Padalka
  • To read the ThinkAdvisor article cited in this story, click here.
  • To read the Reuters article cited in this story, click here.