POLITICO Morning Money: Reg BI Fly Around
DEMS RIP BEST INTEREST RULE — Our Patrick Temple-West: “Landmark rules that the SEC adopted today for financial advisers drew applause from the industry and scorn from Democrats, including presidential candidate Sen. Elizabeth Warren and investor advocates. The so-called best interest regulation, approved by the SEC commissioners along partisan lines, aims to curb conflicts of interest when financial advisers make investing recommendations to customers.
“Warren blasted the new regulation, claiming it will ‘make it easier for Wall Street to cheat families out of their hard-earned life savings.’ Rep. Maxine Waters, chairwoman of the House Financial Services Committee, urged the agency to rescind the rules”
More react – Cowen’s Jaret Seiberg: “The 2020 election ultimately will decide the fate of this standard. Democrats are not satisfied, arguing that the SEC is actually weakening the investment advice standard rather than strengthening it. …
“We expect that if a Democrat wins in 2020 then he/she will push the Labor Department to revive its fiduciary duty and will put a new SEC chairman in charge who backs subjecting all investment advice to a fiduciary standard.”
American Securities Association CEO Chris Iacovella: “The Reg BI final rule was substantially changed from the proposal and has a lot more teeth than we anticipated. It’s going to take some time to figure out just how much the industry will have to change.”
To read the full newsletter, click here.