The main theme of the new fiduciary rule proposal is alignment with other regulators—the SEC and FINRA in particular—but the agency is by no means surrendering its jurisdiction over tax-qualified retirement plans.
The Department of Labor has taken yet another step forward in what has been more than a decadelong effort to update the fiduciary duty applying to investment professionals serving workplace retirement plans.
Multiple national-level conflict of interest rules are now aligned that will require financial professionals to act in the best interest of consumers.
The 2nd U.S. Circuit Court of Appeals found the regulation, which goes into effect tomorrow, is authorized by Dodd-Frank and is not arbitrary and capricious.
A nearly unanimous Supreme Court has seemingly set new limits on the punitive authorities of the U.S. Securities and Exchange Commission (SEC), though just how much has changed is up for debate.
Such alignment would be consistent with what the Department of Labor leadership has been signaling for a number of years now.
One critical component of the Regulation Best Interest is the customer relationship summary form, or “Form CRS,” which provides new and existing clients with detailed information about a firm’s products, fees, conflicts of interest, disciplinary history and more.
“Iowans expect their financial professional to act in the consumer’s best interest when recommending an annuity,” says Iowa Insurance Commissioner Doug Ommen. “Iowa not only expects it, but we will require it.”
FINRA previously addressed reporting of Paycheck Protection Program loan forgiveness in its FAQs related to COVID-19.
At a digital hearing conducted by the Iowa Insurance Division, industry representatives asked the state regulator to grant a safe harbor for broker/dealers that comply with Reg BI.
The firm is accused of disadvantaging certain retirement plan and charitable organization brokerage customers by failing to recognize and act on the fact that they were eligible for less expensive share classes.
Iowa’s new proposed conflict of interest mitigation rules are based closely on the model framework finalized earlier this year by the National Association of Insurance Commissioners—with some important differences.
Two new risk alerts published by the SEC provide broker/dealers and advisers with advance information about the expected scope and content of the initial examinations for compliance with Regulation Best Interest and Form CRS.
The SEC has confirmed that the COVID-19 pandemic will not halt the implementation of the SEC’s Regulation Best Interest, which has a general compliance date of June 30.
“The uncertainties caused by COVID-19 have not changed our perspective or commitment,” SEC Chairman Jay Clayton says.
While in-person participation is an important part of the financial system regulated by the SEC, the virus is forcing market makers to significantly adjust their operations.
As the SEC’s June 30 Regulation Best Interest deadline nears without hope of a grace period, sources say many financial services firms aren’t ready to comply.