SEC Chair Accepts DOL Invite on Standards of Conduct

By John Iekel • June 06, 2017 • 0 Comments
Newly minted Securities and Exchange Commission Chairman Jay Clayton in a recent public comment said he welcomes the Department of Labor’s (DOL) invitation to take a look at the standards of conduct that are at the core of the DOL’s fiduciary rule.

Clayton noted that although the DOL fiduciary rule will be applicable as of June 9, the DOL nonetheless plans to seek additional information concerning aspects of the rule. Further, he said, Secretary of Labor Acosta said he wanted his department and the SEC to “engage constructively” as each analyzes standards of conduct applicable to advisors and broker-dealers that provide investment advice to retail investors.

"The Department of Labor’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,” said Clayton. “I welcome the Department of Labor's invitation to engage constructively as the Commission moves forward with its examination of the standards of conduct applicable to investment advisers and broker-dealers, and related matters. I believe clarity and consistency — and, in areas overseen by more than one regulatory body, coordination — are key elements of effective oversight and regulation. We should have these elements in mind as we strive to best serve the interests of our nation's retail investors in this important area,” he continued.

Clayton noted that his agency has already been conducting a review of that area, and that its efforts and studies “illustrate the complexity of the issues as well as the fast-changing nature of our markets, including the evolving manner in which investment advice is delivered.” And he said that “significand developments in the marketplace” that have taken place since the SEC last sought information from the public also warrant “an updated assessment of the current regulatory framework, the current state of the market for retail investment advice and market trends.”

Clayton said he looks forward to working with the SEC’s other commissioners and staff, as well as retail investors in that effort. “Given the significance of these issues — in particular, for retail investors looking to save for the things that matter most to them, including homeownership, education, and retirement — I look forward to robust, substantive input that will advance and inform the SEC's assessment of possible future actions,” he said.

In addition, Clayton noted, the SEC is making a webform and e-mail box available so the public can comment on these matters in advance of any future SEC action.




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