Labor Secretary Alexander Acosta and Securities and Exchange Commission Chairman Jay Clayton told lawmakers on Tuesday that their agencies would work together on investment advice regulation.
In separate appearances before Senate panels, the two regulators stressed the cooperation that Republican legislators and opponents of the DOL fiduciary rule are demanding. Supporters of the rule, which was finalized last year by the Obama administration, maintain that the DOL did consult with the SEC while it was written.
"The SEC has important expertise and they need to be part of the conversation," Mr. Acosta said to the
Senate Appropriations subcommittee on labor and health and human services. "It's my hope that as the SEC also receives a full complement of commissioners that the SEC will continue to work with the Department of Labor on this issue."
Mr. Clayton was sworn in as SEC chairman on May 4 but the normally five-person commission still has two vacancies. The Trump administration has not yet announced nominees.
Mr. Clayton said that the DOL rule, which was
partially implemented earlier this month but is undergoing a review that may result in changes, would influence any advice regulation that the SEC might decide to pursue. Earlier this month, Mr. Clayton released a
request for comment about fiduciary duty.
"It's not separate," Mr. Clayton said to the
Senate Appropriations subcommittee on financial services. "It's my intent as chairman to try and move forward and effectively deal with that in a way that is coordinated so that our Main Street investors have access to investment advice and access to investment products...[and] at the same time very much fulfilling our investor-protection mission."
His language echoed that of financial industry opponents of the DOL rule, which would require financial advisers to act in the best interests of their clients in retirement accounts. The measure would mostly affect brokers, who currently operate on a suitability standard when selling investment products. Investment advisers must already meet a fiduciary standard.
Critics say that the DOL measure is too complex and costly and would force brokers to abandon clients with modest accounts. Supporters of the rule say that it is necessary to reduce brokers' conflicts of interest that result in the sale of inappropriate high-fee investments that erode savings.
The DOL's request for comment on the rule is undergoing a review at the Office of Management and Budget. When OMB approves the request, it will be released.
