SEC Chairman Jay Clayton recently commented on the Department of Labor's "Fiduciary Rule." In that context, Chairman Clayton stated that "clarity and consistency – and, in areas overseen by more than one regulatory body, coordination – are key elements of effective oversight and regulation." In terms of serving the interests of retail investors, Chairman Clayton highlighted the range of potential actions previously suggested by the SEC, including (i) maintaining the existing regulatory structure, (ii) requiring enhanced disclosures intended to mitigate investor confusion, (iii) development of a best interests standard of conduct for broker-dealers, and (iv) pursuing a single standard of conduct applicable to investment advisers and broker-dealers when they provide advice to retail investors.
To facilitate an assessment of these important areas, the SEC has established a "webform and e-mail box" for the public to make their views on these issues known prior to future SEC action. The SEC is soliciting the public's views, among other things, on the following threshold questions: (1) Has retail investor confusion about the type of professional or firm providing investment advice and the applicable standard of conduct been addressed? (2) Have potential conflicts of interest related to the provision of investment advice to investors been identified? (3) How do retail investors perceive the duties that apply when investment advice is provided in new ways (e.g., robo-advisers)? (4) Is the industry trending toward a fee-based advisory model and away from a commission-based brokerage model?
The foregoing questions represent a subset of an ambitious list of questions articulated by the SEC. For more information about this important SEC initiative, please click here.