The DOL also stated it intended to issue a Request for Information regarding various aspects of its Fiduciary Rule and its desire that the DOL and the Securities and Exchange Commission (SEC) engage constructively as each pursues its ongoing analyses of the standards of conduct applicable to investment advisers and broker-dealers when they provide investment advice to retail investors.
On June 1, 2017, the SEC issued a statement requesting public comments from retail investors and other interested parties on standards of conduct for investment advisers and broker-dealers. The SEC cited the significant developments in the marketplace since the SEC last solicited information from the public in 2013 as the impetus for seeking public comment, including financial innovations, changes to investment adviser and broker-dealer business models, and regulatory developments, one being the issuance and applicability of the Department of Labor’s Fiduciary Rule.
In light of these developments, the SEC expressed its belief that an updated assessment of the current regulatory framework, the current state of the market for retail investment advice, and market trends is important to its ability to evaluate the range of potential regulatory actions.
To facilitate its request for public comment and remain consistent with prior practices followed in other areas of importance to the public and the SEC, including regulatory initiatives under the Dodd-Frank Act and under the JOBS Act, the SEC has made a webform and e-mail box available for members of the public to make their views on these issues known publicly in advance of any future SEC action.
The SEC requested public views on the following issues:
- The extent to which retail investors expressed confusion about the type of professional or firm providing investment advice, and the standards of conduct applicable to different types of relationships.
- Whether potential conflicts of interest related to the provision of investment advice to retail investors in various circumstances have been appropriately identified and, if so, the extent to which they have they been appropriately addressed.
- Whether there are identifiable areas where conflicts of interest are more prevalent, have greater potential for harm or both.
- Whether there is a trend in the provision of retail investment advice toward a fee-based advisory model and away from a commission-based brokerage model, and to what extent any observed trend has been driven by retail investor demand, dependability of fee-based income streams, regulations or other factors.
- Various implementation issues.
Members of the public interested in making their views known on these or other related matters, even before official comment periods may be opened, are invited to submit those views via the webform or e-mail address. Members of the public who wish to submit comments on any official rule making proposals can do so during the applicable comments period which would start with the notice of the initiative published in the Federal Register.