House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) has come out swinging against the Securities and Exchange Commission’s final Regulation Best Interest standards of care for retail investors, going so far as to demand that the agency rescind the rules.
The ink is barely dry on the 1,400 pages of new regulations that the SEC passed just yesterday on a 3-1 vote. Attorneys, lobbyists and consumer advocates told Financial Advisor magazine they are busy carefully pouring over the standards now. You can find more information here.
What is clear from an early reading, however, is that the SEC’s new broker conduct rule does not create the uniform fiduciary standard Chairwoman Waters has been calling for since shortly after the financial meltdown of 2008.
“Instead of providing protections to ensure workers and families are not ripped off when investing their hard-earned savings, this rule will only create confusion. I urge the SEC to rescind this rule and put the interests of savers and retirees first,” Waters said in a statement.
Waters has used several House Banking Committee hearings to call on SEC Chairman Jay Clayton to create a fiduciary standard for brokers that she said is necessary to protect investors from pricey conflicts of interest. The SEC’s best interest proposal was the subject of one of the first hearings she held after taking over the reins of House Banking Committee in January.
Waters was also instrumental in crafting the Dodd-Frank bill in 2010, which gave the SEC the authority to elevate broker advice regulations to a fiduciary level and directed the agency to create a more even regulatory system for brokers and advisors.