House passes Maxine Waters' amendment to stymie SEC advice reform rules

House passes Maxine Waters' amendment to stymie SEC advice reform rules
Measure prevents funding for Reg BI, but could die in Senate.
JUN 26, 2019

The House of Representatives approved legislation Wednesday that effectively would kill the Securities and Exchange Commission's recently approved advice reform package of regulations. The measure by House Financial Services Committee chairwoman Maxine Waters, D-Calif. — an amendment, among several others, to a $47 billion financial services and general government funding bill — passed largely along party lines, 227-200, with Democrats supporting it. The legislation may not survive in the Republican-majority Senate. In addition, the Trump administration has threated to veto the overall appropriations bill. Ms. Waters' amendment would prohibit the SEC from using any of its spending authority from Congress to "implement, administer, enforce or publicize" its final advice reform package. That package was approved 3-1 by the agency in early June and includes the broker-dealer conduct standard Regulation Best Interest, the Form CRS client disclosure rule, an interpretation of the broker-dealer exclusion from adviser regulations and an interpretation of the standard of conduct for investment advisers. Ms. Waters and many other Democratic lawmakers have criticized the SEC rule package as being too weak to protect investors from broker-dealer conflicts of interest. "Rewriting this rule will be a top priority in the next Democratic administration," Barbara Roper, director of investor protection at the Consumer Federation of America, tweeted Tuesday. Ms. Waters' "amendment to hit the pause button on Reg BI until after the election would spare firms unnecessary compliance costs and protect investors from a bad rule." Congressional Republicans and most of the financial services industry support the SEC reforms. "Reg BI is the most comprehensive enhancement of standard-of-conduct rules governing broker-dealers since the enactment of the Securities Exchange Act of 1934," Securities Industry and Financial Markets Association chief executive Kenneth E. Bentsen Jr. said in a statement. "It makes no sense to halt the orderly implementation of this important new set of regulations that would provide strong investor and consumer protections for 43 million households." The Senate has not yet begun its appropriations process. The House and Senate would have to reconcile their spending bills by the end of September in order to avoid a government shutdown. Around the same time, House-Senate deliberation over raising the debt ceiling could complicate negotiations. But in recent years, the Senate has resisted attaching policy riders like Ms. Waters' SEC restrictions to appropriations bills.

Latest News

Senate wants changes to Trump’s tax bill; here’s what’s expected
Senate wants changes to Trump’s tax bill; here’s what’s expected

‘Revenge tax’ on foreign investors could be scrapped in new version.

CFTC’s regulatory pioneer Bagley dies aged 96
CFTC’s regulatory pioneer Bagley dies aged 96

Veteran legislator helped set the standard for derivatives regulation.

Getting your head round AI when compliance is a big concern
Getting your head round AI when compliance is a big concern

As industry edges closer to the technology, an expert explains the options.

Advisor headcount down at Bank of America, Osaic and UBS so far in 2025, Wolfe Research analyst says
Advisor headcount down at Bank of America, Osaic and UBS so far in 2025, Wolfe Research analyst says

Counting advisor moves in and out of firms requires some art as well as science.

Carson Group's M&A head sees '10-to-15 year bull market' for RIAs
Carson Group's M&A head sees '10-to-15 year bull market' for RIAs

“I'm just a big believer that based on demographics alone, we are looking at a 10-to-15 year bull market in M&A in the RIA and independent wealth space,” said Michael Belluomini, SVP of M&A at Carson Group.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave