Waters amendment to kill Reg BI faces new hurdle

Waters amendment to kill Reg BI faces new hurdle
The policy rider, which passed the House largely along party lines, was not included in a budget agreement that requires any changes be approved by both Republicans and Democrats.
JUL 24, 2019

A federal budget agreement earlier this week puts a high hurdle in front of legislation that would effectively kill the Securities and Exchange Commission's recently approved investment advice reform package. Last month, the House approved an amendment to a financial services spending bill that would prevent the SEC from funding the implementation of its new rules. But the budget pact between the White House and congressional leaders includes a stipulation that prevents "poison pills, additional new riders … or any non-appropriations measures" in government funding bills that must be passed this fall unless House Speaker Nancy Pelosi, D-Calif., Senate Majority Leader Mitch McConnell, R-Ky., the two minority-party leaders in each chamber and President Donald J. Trump all agree to them. The SEC's rules, the centerpiece of which is Regulation Best Interest to raise the broker advice standard, have created a partisan split in Congress. House Financial Services chairwoman Maxine Waters, D-Calif., has been a harsh critic of Reg BI, as it's known, and wrote the amendment to kill it. Republicans on the Senate Banking Committee praised the SEC's new investment advice rules in a letter last week. Presumably, if the GOP sticks together in opposing Ms. Waters' amendment, known as a policy rider, it won't be included in the final financial services appropriations bill this fall. "Reg BI is the most significant investor protection enhancement since 1934," Christopher Iacovella, chief executive of the American Securities Association, said in a statement. "Members on both sides of the aisle should resist any attempt by politically motivated special interest groups to weaken this historic investor protection rule." Investor advocates, however, criticize the new SEC rules as being too weak to curb broker-dealer practices that lead to conflicted advice. Because the federal appropriations process often faces twists and turns as Congress attempts to avoid a government shutdown at the end of its fiscal year in September, some opponents of the new SEC rules remain hopeful. "As far as we see it, it's still a live issue, and [Ms. Waters'] policy rider could still be adopted," said Micah Hauptman, financial services counsel at the Consumer Federation of America. A spokesperson for Ms. Waters was not immediately available for comment.

Latest News

Goldman leads wave of prediction market bans at financial firms
Goldman leads wave of prediction market bans at financial firms

As Goldman Sachs tightens rules on event contract trading, RIAs and hedge funds are weighing their own policies

Advisor moves: Baird recruits $600M veteran pair to director roles in North Carolina
Advisor moves: Baird recruits $600M veteran pair to director roles in North Carolina

Meanwhile, Wells Fargo lures defectors from UBS and JPMorgan to expand in the East Coast, while another bank aligns itself with RayJay's financial institutions division.

AI may be nudging some older workers into early retirement, study finds
AI may be nudging some older workers into early retirement, study finds

New research suggests AI-exposed workers over 55 are leaving jobs more often than before ChatGPT’s rise.

Wall Street banks promoting AI agents from research aids into digital coworkers
Wall Street banks promoting AI agents from research aids into digital coworkers

Agentic AI is landing in trading, treasury and wealth management roles across major banks, with advisory functions as the next frontier.

People moves: FiNet hires former LPL executive Andrew Harpp, Ellevest names new CIO
People moves: FiNet hires former LPL executive Andrew Harpp, Ellevest names new CIO

Wells Fargo affiliate and women-focused wealth firm both promote leadership as they scale advisor support.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income