By George C. Miller, Esq. of Shustak Reynolds & Partners, P.C. posted on Thursday, April 12, 2018.

George C. Miller

Partner

Location: San Diego, California
Phone: (619) 696-9500 (Ext. 105)
Direct: (619) 501-8270
Email: [email protected]

George C. Miller, Esq.
619.696.9500 ext. 105
[email protected]

Signaling the next chapter in the slow moving “fiduciary rule” saga, the Securities and Exchange Commission will meet next week to discuss the framework for a new, SEC-backed standard of conduct for brokers.  At the meeting, which will be open to the public, the SEC will formally consider the following:

1. Whether to propose new and amended rules and forms to require registered investment advisers and registered broker-dealers to provide a brief relationship summary to retail investors;

2. Whether to propose a rule to establish a standard of conduct for broker-dealers and natural persons who are associated persons of a broker-dealer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer; and

3. Whether to propose a Commission interpretation of the standard of conduct for investment advisers. 

Any new rule promulgated by the SEC would be in addition to the Department of Labor’s existing fiduciary rule, which would require financial advisors to act in the “best interests” of clients and significantly changed the rules surrounding commissions and other transaction based compensation.  While parts of that rule were implemented in 2016, causing a sea change in the compensation and business models of many large broker-dealers, enforcement of the rule has been delayed until July 2019 while the DOL conducts a further review pursuant to a directive from President Trump.  While the original DOL rule is most likely dead–a Federal Court of Appeals in Texas recently voted 2-1 to strike down the DOL’s version of the fiduciary rule and it is widely expected to be gutted following the DOL’s mandated review–we expect to see a new fiduciary-like rule to be developed jointly by the SEC and DOL in the coming months. 

Shustak Reynolds & Partners, P.C. regularly represents firms and individuals in SEC, FINRA, securities, investment, and financial services matters, including litigation, arbitration, enforcement and investigation matters. If you or your company require counsel in these areas, contact us today for a confidential, complimentary consultation.

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