Clayton: SEC Fiduciary Rule Will Give Investors More Advice Options

Securities and Exchange Commission chairman Jay Clayton sat before the House Financial Services Committee on Wednesday and informed lawmakers that the agency is drafting a fiduciary rule proposal.

The Department of Labor’s fiduciary rule, which is currently under review as directed by the President, attempts to reduce conflicts of interest in retirement investment advice and redefines who is considered an investment advice fiduciary under the Employee Retirement Income Security Act of 1974. Enforcement of the rule was recently delayed for 18-months until July 1, 2019.

Rep. Ann Wagner (R-MO), who recently introduced a bill to repeal the DOL’s fiduciary rule and replace it with a best interest standard of conduct for brokers, asked if the SEC had a timeline to promulgate its own rule.

“The next step in anything like this would be a rule proposal. We’re working on such a proposal,” Clayton said. “We want to work with the Department of Labor. If this were easy, it would already be fixed.”

Clayton reiterated comments made last month before the Senate Banking Committee that any joint-rulemaking efforts conducted with the DOL must adhere to four principles: choice, clarity, consistency, and coordination.

Clayton said that he is “confident” that the SEC will put forward a rule that addresses the four issues and is “clear and comprehensible to the average investor, consistent across retirement and non-retirement assets and coordinated with other regulatory entities, including the DOL and state insurance regulators.”

“Investors should have a choice,” said Clayton. “What type of account they want, what type of relationship they want, and what type of assets they want to invest in.”

The SEC is currently reviewing information submitted from its recent public comment request on standards of conduct for investment advisers and broker-dealers.
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