Fiduciary Stds Developments—May 2018

May 29, 2018

Key developments:

  • Dept. of Labor originally proposed its Fiduciary Rule on April 6, 2016.
  • It was upheld by several federal courts until this year.
  • However, in the meantime until then, the DoL deferred full implementation and enforcement of the rule as well.
  • Fifth Circuit federal court vacated the Fiduciary Rule by overturning a lower court decision on March 15, 2018.
  • DoL had until April 30 to appeal the decision to the Supreme Court.  It did not do so, effectively voiding the rule.
  • On April 18, 2018, the SEC proposed two relevant rules and interpretations:  Regulation Best Interest and Form CRS.  In short, the proposals seem focused on providing investors with more clarity over a broker's role.  However, the proposed Reg. Best Interest does not create a fullsome fiduciary standard for brokers as many parties had wished.  Comments on the proposals are due in July.

Resources:

SEC's Press Release:  https://www.sec.gov/news/press-release/2018-68

SEC's Regulation Best Interest proposal:  https://www.sec.gov/rules/proposed/2018/34-83062.pdf

Latham Watkin's recent artilce is the best we've seen so far:  https://www.lw.com/thoughtLeadership/SEC-proposed-best-interest-standard-broker-dealers