Deadline for Comments on SEC’s Investment Advice Rule is Aug. 7
The comment period for the SEC’s proposed investment advice reform is officially open, with the deadline set for Aug. 7, InvestmentNews reports.
On Wednesday, the Federal Register published the proposal that the SEC unveiled in April, covering disclosure requirements for brokers as well as investment advisors, a best interest standard for brokers, changes to financial advisor titles and an interpretation of how the fiduciary standard already applies to investment advisors, according to the publication.
The 1,000-page proposal has a myriad of questions likely to attract hundreds of comments, InvestmentNews writes. One of the main criticisms against the SEC’s Regulation Best Interest is the lack of a definition of “best interest,” as reported.
Four of the five commissioners said at the SEC’s April 18 open meeting the term should have been defined, as ambiguity would cause confusion among investors and cause compliance and enforcement hiccups. Fiduciary advocates such as the CFA Institute and the Institute for Fiduciary Standard have slammed SEC chief Jay Clayton’s assertion that the new set of rules would harmonize the divergent regulations imposed on broker-dealers and investment advisors. And initial reaction from investors was overwhelmingly negative as well, as reported.
The SEC’s proposal comes on the heels of an appeals court decision to vacate the Department of Labor’s fiduciary rule, which purported to force only retirement account advisors to put clients’ interests first. The DOL has made it clear that it will not pursue violations of the rule, which went into only partial effect last summer.