SEC To Air Public Views on Best Interest Standard

The Securities and Exchange Commission will meet next week to discuss its ongoing best-interest standard for brokers.

Much of that work has gone on behind closed doors, with few details emerging. According to a notice posted to the SEC website Wednesday night, that will change with a public meeting at 3:30 p.m. April 18 at the agency's Washington, D.C. offices.

The meeting agenda includes:

1. Whether to propose new and amended rules and forms to require registered investment advisers and registered broker-dealers to provide a brief relationship summary to retail investors.
2. Whether to propose a rule to establish a standard of conduct for broker-dealers and natural persons who are associated persons of a broker-dealer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer.
3. Whether to propose a Commission interpretation of the standard of conduct for investment advisers.

Dodd-Frank Mandate

The SEC has a mandate to establish investment advice rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. While agency staff worked on a proposal under former chair Mary Jo White, political friction prevented a vote to adopt rules.

The five-member commission was short two members for all of 2016 and 2017.

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In the meantime, the Department of Labor issued a fiduciary rule covering investments into retirement accounts. An appeals court threw out the rule in a surprise decision March 15.

In January, Commissioners Hester M. Peirce and Robert J. Jackson Jr., both nominees of President Donald J. Trump, joined SEC commissioners Kara Stein and Michael Piwowar, along with SEC Chairman Jay Clayton.

Clayton initiated work on new investment advice rules in June, issuing a broad call for public comment.

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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