The Fiduciary Rule (Sep. 9)

A look today at one of the most vexing and vied over Dodd-Frank rulemakings — actually two of them — the new Fiduciary Rules on the standard of care owed by brokers to customers, years in the making at the SEC and DOL but likely to see final agency action this fall.



Status of the Fiduciary Rule

Tomorrow, two House Financial Services Subcommittees will shed light on the recondite and slow-moving but bitterly fought-over set of rules mandated by Dodd-Frank to make brokers legally liable for the investing advice they give to customers.  The Oversight and Investigations Subcommittee and the Capital Markets and Government Sponsored Enterprises Subcommittee’s joint hearing on the rule is called “Preserving Retirement Security and Investment Choices for All Americans.”

What is at stake?  A White House Council of Economic Advisers analysis estimated conflicts of interest by brokers’ result in annual losses of about 1 percentage point for affected investors—or about $17 billion a year in total.  But several false starts, blown deadlines, and the multi-agency aspect of the rule-making over four years have frustrated investors and industry alike.

The two mandated rules apply to different laws governing retirement investments regulated by different agencies.  The rule proposed by the Department of Labor fits within the ERISA retirement framework while the SEC’s rule operates within the structure of the Investor Adviser Act and the Investment Company Act of 1940.

The SEC has struggled for some time over how to tackle a uniform standard of care that advisers and brokers owe to their customers.  The 2010 Dodd-Frank Wall Streetreform law required the SEC to study the issue and gave the SEC the authority to write rules but did not mandate any changes.  The SEC has worked fitfully on the rule for years under Chairs Schapiro and now White, insisting it was a short-list priority.  But the SEC did not list the fiduciary rule even in what it calls a “pre-rule stage” form in its last report in March — the forum for publicly announcing a timeline through the federal government’s official channel.  Staffers add that the two seats being vacated at the Commission only complicate the agency’s ability to craft a rule expeditiously.

As the SEC continues its work, the Department of Labor looks closer toe finish line on a parallel proposal.   It is now finalizing a rule proposed in June after holding extensive hearings on it in July.  The next step will be publishing a transcript of the hearings, which starts the clock running on the final comment period for the public to call for any last-minute changes.  The DOL is expected to release the final version of the rule by December, but it could come as soon as next month.

The Financial Services Committee is considering a bill to halt the rules and another to require the SEC to issue its proposed rule first.  Even if the Committee reports out one of the bills, resistance from Senate Democrats dims their chances down the road.  Republicans are also trying to defund the rule via appropriations bills.  Separately, Republicans are trying to defund the rule in appropriations bills as well.


33 thoughts on “The Fiduciary Rule (Sep. 9)”

  1. I happen to be writing to make you understand what a terrific discovery my cousin’s daughter enjoyed going through your blog. She discovered lots of issues, most notably how it is like to have a very effective giving heart to have many more effortlessly fully understand certain extremely tough matters. You really did more than my desires. Many thanks for displaying the helpful, healthy, educational and also easy thoughts on the topic to Gloria.

  2. Thank you for each of your hard work on this web page. My aunt really likes going through investigations and it’s really obvious why. Most of us learn all of the lively method you offer practical strategies through this web site and even increase participation from some other people on the issue so our favorite girl is in fact learning a lot of things. Take advantage of the rest of the year. You are always doing a really good job.

  3. I am really enjoying the theme/design of your web site.
    Do you ever run into any web browser compatibility issues?
    A couple of my blog visitors have complained about
    my site not operating correctly in Explorer but looks great in Safari.

    Do you have any ideas to help fix this issue?

    asmr 0mniartist

  4. My brother recommended I may like this blog. He was once entirely right.
    This post truly made my day. You can not consider simply how
    so much time I had spent for this info! Thank you! asmr 0mniartist

  5. Heya! I understand this is sort of off-topic however I
    had to ask. Does managing a well-established blog such
    as yours require a large amount of work? I am completely new to blogging however I do write
    in my journal daily. I’d like to start a blog so I can easily share
    my experience and feelings online. Please let me know if you have any kind
    of suggestions or tips for new aspiring bloggers.
    Appreciate it! asmr 0mniartist

  6. My family members all the time say that I am wasting my time here at
    web, however I know I am getting experience daily
    by reading thes fastidious articles or reviews.

  7. Pretty great post. I just stumbled upon your blog and wanted to say that I have truly loved surfing around your blog posts.
    After all I’ll be subscribing for your rss feed and I’m hoping you write once more soon!

  8. Link exchange is nothing else except it is only placing the
    other person’s web site link on your page at appropriate place
    and other person will also do same for you.

  9. It’s in reality a nice and useful piece of info.
    I am happy that you shared this useful info with us.
    Please stay us up to date like this. Thank
    you for sharing.

  10. Hey There. I found your blog using msn. This is a very well written article.
    I’ll be sure to bookmark it and come back to read more of your useful info.

    Thanks for the post. I will certainly return.

  11. Very nice post. I just stumbled upon your weblog and wished
    to say that I’ve really enjoyed browsing your blog posts.
    After all I’ll be subscribing to your rss feed and I hope you write again very soon!

  12. scoliosis
    Wonderful blog! I found it while searching on Yahoo News.

    Do you have any tips on how to get listed in Yahoo News?

    I’ve been trying for a while but I never seem to get there!
    Appreciate it scoliosis

  13. scoliosis
    We are a group of volunteers and starting a new
    scheme in our community. Your site offered us with valuable info to work on. You’ve
    done a formidable job and our entire community will be grateful to you.

  14. scoliosis
    Hi there i am kavin, its my first occasion to commenting anyplace, when i read this piece of writing
    i thought i could also make comment due to
    this good post. scoliosis

  15. Wow! This blog looks just like my old one! It’s on a totally different subject but it has
    pretty much the same layout and design. Superb choice of

  16. Howdy! This article could not be written much better!
    Looking at this post reminds me of my previous roommate!
    He continually kept talking about this. I will forward this information to him.
    Pretty sure he will have a good read. Thanks for sharing!

  17. Thanks for one’s marvelous posting! I seriously enjoyed reading it, you’re a great author.I will make sure to bookmark your blog and will come back in the foreseeable future.
    I want to encourage one to continue your great posts, have a nice holiday weekend!

  18. I blog frequently and I truly appreciate your information. The article
    has truly peaked my interest. I am going to bookmark your website and keep checking for new information about once per week.
    I opted in for your RSS feed too.

  19. After looking into a few of the blog posts on your web page, I really like
    your way of blogging. I saved it to my bookmark website list and will be checking back soon. Take a look at my web site too and let me know what
    you think.

  20. Wonderful goods from you, man. I have take note your stuff previous to and
    you’re simply too great. I actually like what you’ve received here,
    certainly like what you’re stating and the way in which
    by which you are saying it. You are making it enjoyable and you
    still take care of to stay it wise. I can’t wait to read far more from
    you. This is actually a wonderful site.

  21. Good way of describing, and nice piece of writing to obtain data regarding my presentation subject matter, which i am going
    to present in institution of higher education.

  22. You’re so awesome! I don’t think I’ve read something like this before.
    So wonderful to discover somebody with some genuine
    thoughts on this topic. Seriously.. thanks for starting this up.
    This web site is one thing that’s needed on the internet, someone with some originality!

Leave a Comment

Your email address will not be published. Required fields are marked *