SEC Should Have Been The Agency To Deal With Fiduciary, Ex-Chief Says

WASHINGTON --Former Securities and Exchange Commissioner Paul S. Atkins expressed disappointment this morning with Labor Secretary Alexander Acosta's initial handling of the controversial fiduciary rule.

In a Wall Street Journal op-ed last month, Acosta announced that he would permit the fiduciary rule to take effect, which happened at 11:59 p.m. June 9.

This week's agenda at the Insured Retirement Institute's Government, Legal and Regulatory Conference is heavily tilted toward the Department of Labor fiduciary rule.  Atkins tried "a Hail Mary pass" to get Acosta to take a harder line on the June 9 deadline, but the secretary wasn't swayed.

Still, "there are all sorts of ways he can delay it," Atkins said, referring to Phase II of the rule, which takes effect Jan. 1, 2018. "My question is what is he going to do with regards to the lawsuits? I hope that the secretary has a plan and (it) is not actually evident to me that he does."

Atkins is chief executive officer of Patomak Global Partners, a financial services consultant. The SEC is the right agency to handle any fiduciary rule, he said, but is sadly bogged down in politically motivated 3-2 votes.

Prior to 2009, the SEC rarely had the 3-2 party line votes you see with regularity nowadays, Atkins said.

"The SEC should have been the one to approach this from the beginning, not the DOL," he said.

A DOL panel followed Atkins and emphasized the importance of commenting on a Request For Information (RFI) the DOL sent to the Office of Management and Budget last week. The request is part of Acosta's review of the DOL rule as ordered by President Donald J. Trump in his Feb. 3 memorandum.

"The RFI could be very telling," said Robert J. Doyle, vice president of Prudential. "This is the first formal document to come out of the department since Acosta's confirmation. ... This could give us some insight into the department's thinking going forward."

The panel agreed the fiduciary rule future is probably Acosta's alone to decide. It isn't likely that an assistant secretary will be confirmed and in place before the fall, Doyle said.

Panelists also agreed some changes are likely. There's a good chance the Best Interest Contract Exemption contract requirement is eliminated, said Stephen M. Saxon, chairman of the Groom Law Group.

"I'm feeling fairly comfortable that the department is sort of making an effort at least around the exemptions to make them more workable," Doyle added. "One of the things I've heard from the department is when the RFI is published, if you have concerns ... share them with the department sooner rather than later."

 

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

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