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.