Menu

Expect Focus Life Insurance, June 2017

SEC Seeks Public Comments on Standards of Conduct for Investment Advisors and Broker-Dealers

Financial Services Regulatory   |   Life, Annuity, and Retirement Solutions   |   June 23, 2017
Download   
Share Page

On June 1, SEC Chairman Jay Clayton issued a statement seeking comments from interested parties regarding the standards of conduct for investment advisers and broker-dealers providing investment advice to retail investors. The statement came just before the June 9 partial applicability date of the DOL’s Fiduciary Rule, and responded to labor secretary Alexander Acosta’s previously expressed desire that the SEC and DOL work together as both continue to assess potential changes in this area.

Although Clayton noted that the SEC has been assessing these standards for over a decade, he emphasized that significant changes in this area — including the fiduciary rule itself, and recent technological innovations impacting the marketplace — have renewed the need to examine the current regulatory framework. He also expressed his intent to coordinate with the DOL and to pursue more harmonized regulatory treatment of investment advice given to retail customers by investment advisors and broker-dealers.

To that end, Clayton asked interested parties to submit data, suggestions, and other information that will help the SEC assess this regulatory framework and inform potential future actions — the first such request since the SEC sought public comment on these standards in 2013. There is no specific deadline, and interested parties can submit comments online and by email outside of official comment periods. And while the chairman clarified that the SEC seeks all relevant information, he posed a long list of specific questions and particular areas of interest.

Some of these topics address recent developments, such as the multiple standards of conduct that will apply under the fiduciary rule and the impact of technological advances. Many, however — including retail investor confusion about the applicable standards, the effects of the differing standards, potential conflicts of interest, and the trend toward a fee-based advisory model — overlap with information gathering and analysis the SEC previously undertook in response to the Dodd-Frank Act’s mandate that it consider standardizing regulations in this area. Differences among SEC commissioners at that time meant that little ultimately came of that prior assessment. This time, however, the result may be different, as the chairman is committed to a more active approach and the potential exists for coordinated efforts by the SEC and DOL.


©2020 Carlton Fields, P.A. Carlton Fields practices law in California through Carlton Fields, LLP. Carlton Fields publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information and educational purposes only, and should not be relied on as if it were advice about a particular fact situation. The distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship with Carlton Fields. This publication may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our Contact Us form via the link below. The views set forth herein are the personal views of the author and do not necessarily reflect those of the firm. This site may contain hypertext links to information created and maintained by other entities. Carlton Fields does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside sites.

Subscribe to Publications

Disclaimer

The information on this website is presented as a service for our clients and Internet users and is not intended to be legal advice, nor should you consider it as such. Although we welcome your inquiries, please keep in mind that merely contacting us will not establish an attorney-client relationship between us. Consequently, you should not convey any confidential information to us until a formal attorney-client relationship has been established. Please remember that electronic correspondence on the internet is not secure and that you should not include sensitive or confidential information in messages. With that in mind, we look forward to hearing from you.