In addition to the rules under consideration in Nevada, Maryland and New Jersey, New York has adopted a best-interests standard for insurance products. While the securities industry wields significant clout in New York's state legislature, its power could be diminished if investors encounter losses in the next few years.
Meanwhile, Illinois is considering legislation that one compliance expert described as a "fill in the blanks" law.
Many of the proposals are pulling language from the DOL's now-dead BIC (Best Interest Contract). Others are using ERISA language, a standard that could be challenging for both brokers and RIAs.
Compliance experts remain uncertain about what the SEC means when it says it Reg BI requires brokers not to put their own interest ahead of their clients. "Does it mean 50-50 or 51-49?" one expert asked.
All this confusion may explain why compliance experts at several IBDs said they intend to retain much of the documentation and transparent contract terms they had planned to implement before the DOL rule was thrown out.