Under the 2010 Dodd-Frank law, the Securities & Exchange Commission (SEC) is authorized to create fiduciary rules related to its regulation of the industry – it just hasn’t yet done so, and recent comments by the SEC indicate that a new rule might be slow in the making.
The SEC fiduciary rule is expected to require both investment advisers and brokers to meet a fiduciary standard for advice to retail customers. While advisers already must act in their clients’ best interests or engage in a fiduciary relationship, brokers currently are subject to a less stringent suitability standard.
The SEC’s delay comes as the Department of Labor is moving ahead with its own fiduciary rule, which goes into effect April 2017. SEC Commissioner Mary Jo White says she still expects a new rule to go into effect at some point, which likely will have some differences to the DOL’s new rule – although she expects to coordinate with the DOL.
The SEC is currently missing two of its five commissioners, further delaying any action to hurry along a vote. As of a few months ago, the SEC projected that it will propose a new rule by next April, around the same time as the DOL’sa rule takes effect.
Do you believe your advisor violated his or her fiduciary duty to you?
The attorneys at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.
If you believe your adviser violated his or her fiduciary duty to you, you may have certain legal rights that require your immediate attention.
Contact us to schedule an appointment or consultation today.