Democrats and Consumer Groups Slam SEC’s Best Interest Proposal
Massachusetts’ top watchdog and consumer groups have blasted the SEC’s proposed Regulation Best Interest, while industry groups came out in support of the rule, Reuters writes.
As the comment period ended Tuesday for the SEC’s proposed rules on broker and advisor conduct, Secretary of the Commonwealth William Galvin’s office said the regulation doesn’t do enough to protect investors, echoing Sen. Elizabeth Warren, D-Mass., and other critics of the proposal, according to the newswire.
But Galvin went one step further and said Massachusetts would implement its own regulations on brokers if the SEC’s rules get adopted as they currently stand, Reuters writes.
Consumer advocacy group Better Markets is also calling for the SEC to revise the rule by requiring brokers not just to disclose, but to eliminate conflicts of interest when advising clients, according to the news service.
Sifma and the Investment Company Institute, meanwhile, say they support the SEC’s current proposal, Reuters writes.
It may take months for the SEC to finalize the proposal, according to the newswire. Industry insiders tell Reuters that’s how long it could take before the current nominees to replace Democratic commissioner Kara Stein and Republican commissioner Michael Piwowar take their place on the five-member SEC panel. And SEC chairman Jay Clayton isn’t likely to proceed with the regulation until then, insiders tell the newswire.
Stein’s term expired last year but she has stayed on per a rule that lets commissioners remain on the panel until their replacement is confirmed, for up to a year and a half.
Allison Lee, a former aide to Stein, will likely be president Donald Trump’s nominee to replace Stein, sources told Bloomberg earlier this week.
Meanwhile, the Senate Banking Committee has already held a confirmation hearing for Elad Roisman, Trump’s nominee to replace Piwowar, who stepped down from the SEC lasts month. But final confirmation votes traditionally pair Democratic and Republican nominees.