SEC To Vote June 5 On Regulation Best Interest

The Securities and Exchange Commission scheduled a June 5 vote on its Regulation Best Interest rulemaking package.

The vote will include four items: Regulation Best Interest – Standard of Conduct for Broker-Dealers, Form CRS, Standard of Conduct for Investment Advisers and an item not included in the third-part rulemaking package called Interpretation of “Solely Incidental.”

The description listed in the meeting agenda for Interpretation of “Solely Incidental” reads:

“The Commission will consider whether to publish a Commission interpretation of the solely incidental prong of section 202(a)(11)(C) of the Investment Advisers Act of 1940.”

Most recently, in March, the rulemaking package faced scrutiny from the House Subcommittee on Investor Protection, Entrepreneurship and Capital Markets. The subcommittee offered both support and criticism emphasizing their bipartisan interest in protecting main street investors, but concluded that ultimately, there was more work to be done on the rule.

Aimed at protecting Main Street investors, the fiduciary rule outlined in Reg BI would require that broker-dealers act in the best interest of their clients, a change from the current suitability standard that B-Ds follow.

This and the lingering ghost of the vacated DOL fiduciary rule, has led to discussions about whether Reg BI is too strong, or not “toothy” enough.

The legislation has drawn thousands of comments from investors, special interest groups and industry professionals since its release last April.

AdvisorNews Managing Editor Cassie Miller may be reached at [email protected]. Cassie has an extensive background in magazine writing, editing and design. Follow her on Twitter @ANCassieM.