Lawmakers urge SEC to retool Reg BI

By Anne Sherry, J.D. The ranking members of four House and Senate committees are leading a call for the SEC to revise Regulation Best Interest, asserting that the proposed rule does not quite satisfy the agency’s Congressional mandate and that it falls short of protecting investors. In the letter to SEC Chairman Jay Clayton, the lawmakers urge the SEC to amend the proposal before it is finalized, even if it means re-proposing the rulemaking. Thirty-one legislators signed the letter along with Ranking Members Maxine Waters (D-Cal.), Bobby Scott (D-Va.), Sherrod Brown (D-Ohio), and Patty Murray (D-Wash.). The Dodd-Frank Act authorized the SEC to require all brokers and advisers to comply with the same fiduciary standard, the letter states. But rather than propose Regulation BI under Section 913(g), the SEC used the less specific Section 913(f), which authorized the SEC to conduct rulemaking on the standards of care for advisers considering the results of a mandatory study.…

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