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REGULATION/LEGISLATION

SEC seeks public comment on fiduciary rule impact

Securities and Exchange Commission Chairman Jay Clayton

SEC Chairman Jay Clayton said Thursday that his agency wants input on how the fiduciary rule will impact retail investors and entities regulated by the Securities and Exchange Commission.

“The Department of Labor's fiduciary rule may have significant effects on retail investors and entities regulated by the SEC. It also may have broader effects on our capital markets. Many of these matters fall within the SEC's mission of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation,” Mr. Clayton said in a statement.

When Labor Secretary Alexander Acosta affirmed the June 9 implementation date for the rule, he said that the DOL will seek further public input on how to revise the entire rule, and that he hoped the Securities and Exchange Commission “will be a full participant” in that review.

Mr. Clayton said he welcomed that invitation. “I believe clarity and consistency — and, in areas overseen by more than one regulatory body, coordination — are key elements of effective oversight and regulation,” he said.

He noted that the SEC has been reviewing a fiduciary standard for some time with input from various sources, including a 2006 RAND study of investor perspectives, a 2011 staff study and a 2013 solicitation for comments, but that there have been “significant developments in the marketplace” since then.

“These efforts illustrate the complexity of the issues as well as the fast-changing nature of our markets, including the evolving manner in which investment advice is delivered,” he said, adding that potential actions include maintaining the existing regulatory structure, requiring enhanced disclosures, developing a best interests standard of conduct for broker-dealers, or a single standard of conduct.

Comments will be posted to the SEC's website.