On June 2, 2017, Jay Clayton, Chairman of the Securities and Exchange Commission (SEC), requested public input on standards of conduct for investment advisers and broker-dealers. The SEC last solicited input on the regulation of investment advisers in 2013 and Clayton believes that advances in technology and changes in business models have since transformed the market for retail investment advice. Additionally, confusion surrounding investment adviser conflicts of interest, among other things, have prompted the SEC to seek feedback on the standards. Topics touched on in the request include:

  • types of advisers providing investment advice and applicable standards of conduct for each;
  • conflicts of interest;
  • effects of market developments and advances in technology;
  • fee-based vs. commission-based investment advice;
  • department of Labor’s Fiduciary Rule;
  • pros and cons of multiple standards of conduct for advisers;
  • effects on particular segments of the market;
  • disclosure-based vs. standards-of-conduct-based regulatory action;
  • who should be considered “retail investors”;
  • how should “investment advice” be defined;
  • costs and benefits of different regulatory approaches;
  • comparison of U.S. regulation to non-U.S. regulation in this area;
  • material changes since last data solicitation in 2013.

Clayton hopes his solicitation will garner “robust, substantive input that will advance and inform the SEC’s assessment of possible future actions.”