On June 1, 2017, the Securities and Exchange Commission requested input regarding the DOL Fiduciary Duty Rule and the SEC’s development of its own fiduciary standard governing investment advice to retail investors. To view Chair Clayton’s public statement requesting Public Comments from Retail Investors and Other Interested Parties on Standards of Conduct for Investment Advisers and Broker-Dealers, click here.
In the public statement, Chair Clayton remarked: “The [DOL’s] Fiduciary Rule may have significant effects on retail investors and entities regulated by the SEC. It also may have broader effects on our capital markets. Many of these matters fall within the SEC’s mission of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation.” Chair Clayton stressed the need for intergovernmental coordination and “robust, substantive input that will advance and inform the SEC’s assessment of possible future actions.”
Curiously, the SEC did not specify a deadline for the requested input, which raises the question: Just how long is this analysis going to take? After all, the RAND study concluded almost ten years ago. And, the DOL Fiduciary Duty is scheduled for full implementation on January 1, 2018.
In our view, the SEC’s reasoning leads to one, and only one conclusion: The DOL Rule should be rescinded until the Commission completes its analysis and there has been full and complete intra-agency review and publication of (a) whether there should be a uniform fiduciary duty standard and, if so, (b) its scope. The Commission is charged with regulation of our capital markets, of which retirement accounts are only a part.
Otherwise, chaos will reign and the retail investor will ultimately suffer, as “orderly disorder is based on careful division.”