Today, the House of Representatives passed the Financial Services and General Government Appropriations Act, which includes an amendment that would block funding for the Securities and Exchange Commission (SEC) to implement Regulation Best Interest (Reg BI). Both the Investment Company Institute (ICI) and the Insured Retirement Institute (IRI) issued statements denouncing the action.
“We are disappointed in today’s vote in the House of Representatives to advance legislation that includes a provision to prohibit the Securities and Exchange Commission from proceeding to implement, administer, enforce or publicize Regulation Best Interest,” the IRI says in its statement. “This newly adopted rule raises the standard of conduct for financial professionals, expressly requiring them to act in their clients’ best interest. Reg BI represents a substantial strengthening of consumer and investor protection compared to existing law.”
For its part, the ICI says: “Regulation Best Interest ensures investors are afforded strong protections when they receive recommendations from financial intermediaries. Passage of this amendment seemingly relitigates the DOL fiduciary rule, which was vacated by the Fifth Circuit Court. Preventing the SEC from implementing Regulation Best Interest creates a legal void that leaves millions of retail savers without critical investor protections. ICI urges Congress to strip this language from the final spending bill.”