SEC Wants Hard Data to Support Uniform Fiduciary Standard
The SEC is requesting information from the public to determine whether and how to issue new rules imposing a uniform fiduciary standard on broker-dealers and advisers that provide personalized financial advice to retail customers. The SEC will also consider regulatory harmonization. A staff study mandated by the Dodd-Frank Act recommended a uniform standard and regulatory consistency. Now, the SEC wants “[d]ata and other information from market intermediaries and others about the potential economic impact of the staff’s recommendations, including information about the potential impact on competition, capital formation, and efficiency.” The SEC wants “quantitative and qualitative data and other information and economic analysis…about the benefits and costs of the current standards of conduct of broker-dealers and investment advisers when providing advice to retail customers, as well as alternative approaches to the standards of conduct.”
OUR TAKE: We believe that the SEC intends to impose a uniform fiduciary standard and harmonize the BD and IA rules. However, it wants to insulate its rule-making from a court challenge that it did not properly consider the economic costs and benefits of new regulations.