House Financial Services CommitteeChairwoman Maxine Waters. (Photo: Bloomberg)
The full House approved on Wednesday House FinancialServices Committee Chairwoman Maxine Waters' amendment to block theSecurities and Exchange Commission from enforcing Regulation Best Interest.
|The House voted 227-200 to pass Waters' amendment along with apackage of other changes to HR 3351, the Financial Services andGeneral Government Appropriations Act. The provision would preventthe SEC from proceeding to implement, administer, enforce or publicize Reg BI.
|The Insured Retirement Institute said after the vote that it was“disappointed.”
|“Congress should allow the implementation of Reg BI to moveforward and it should be given time to work,” it said in astatement. “This newly adopted rule raises the standard of conductfor financial professionals, expressly requiring them to act intheir clients' best interest.”
|Waters' amendment likely faces a tough road in the Senate,however.
|“Reg BI represents a substantial strengthening of consumer andinvestor protection compared to existing law,” IRI said in astatement. “It requires all financial professionals including thosethat work for and with IRI member companies, to operate under anew, more stringent and robust regulatory regime that imposesconsiderable new responsibilities on financial professionals andfirms.”
|Waters, of California, was among 35 House Democratswho complained to SEC Chairman JayClayton late last year that the agency's Reg BI —part of the securities regulator's much-anticipated advicestandards package — was not a true fiduciary standard.
|Investment Company Institute Presidentand CEO Paul Schott Stevens said that Reg BI ”ensuresinvestors are afforded strong protections when they receiverecommendations from financial intermediaries. Passage of thisamendment seemingly relitigates the DOL fiduciary rule, which wasvacated by the Fifth Circuit Court.”
|Preventing the SEC from implementingReg BI, Stevens added, “creates a legal void that leaves millionsof retail savers without critical investor protections. ICI urgesCongress to strip this language from the final spending bill.”
|READ MORE:
|SEC, DOL moving in tandem on investment advicerules
|Suitability plus? Lawyers say SEC proposal lacksclarity
|CFA Institute says SEC has immediate authority toclarify broker roles
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2023. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
