SEC proposes investment-advice rule; DOL rule remains in flux | American Funds

Capital Group Policy Spotlight

April 20, 2018

SEC proposes investment-advice rule; DOL rule remains in flux

On Thursday, April 19, the SEC officially proposed its investment-advice rule, one of the first steps in a lengthy regulatory process.

The proposed SEC rule focuses on three areas:

  • A new “best interest” standard of care for brokerage recommendations
  • New disclosure obligations for brokers and RIAs
  • Additional guidance on the fiduciary standard of conduct for RIAs

Once the contents of the rule are published in the federal register, the public will have 90 days to provide comments.

The proposal exceeds 900 pages, so evaluating its impact will take time. Moreover, there are sure to be multiple revisions and, even with such revisions, its path to approval is unclear.

Separately, the DOL Fiduciary Rule remains in flux. In March, the 5th Circuit Court of Appeals vacated the DOL Fiduciary Rule that had gone into effect in June of 2017. The Department of Labor has until April 30th to decide if it will appeal.

We will continue to provide updates on both matters as warranted.


Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

This material is intended for use by financial professionals or in conjunction with the advice of a financial professional.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.