Results for "The Washington INsider"

Oct 9, 2018, 2:59 PM EST

New Jersey could be first in fiduciary 'blue wave' with pending proposal

New Jersey

By Mark Schoeff Jr.

A calm surface on the waters of investment advice reform is about to be broken by what could be the beginning of a fiduciary blue wave at the state level.Next Monday, the New Jersey Bureau of Securities is expected to release for public comment a proposed rule that would require all financial advisers in the state to put their clients' interests ahead of their own when making investment recommendations. This statewide fiduciary duty could very well conflict with the final advice rule the Securities and Exchange Commission is expected to promulgate later this year or in early 2019. With the SEC reviewing thousands of comments about its proposal, the advice reform issue has been relatively quiet for a few weeks. That is set to change.Other states could join New Jersey in drafting their own standard. In Nevada, there is already a fiduciary law on the books. But the state's securities regulator has not yet proposed the regulations that... Read full post

Sep 11, 2018, 5:06 PM EST

Shorthanded SEC may have to decide investment advice proposal on its own


By Mark Schoeff Jr.

For the moment, the Securities and Exchange Commission has a full complement of five members, but it may not last for long. Last week, the Senate confirmed Elad Roisman to a Republican seat that had been vacated by Michael Piwowar in July. It was an odd occurrence because SEC vacancies are usually filled in tandem, with the Senate approving a Republican and a Democrat. Democratic SEC member Kara Stein, whose term ended last year, has to depart by the end of the current Congress in December.Mr. Roisman traveled alone because Senate Democrats had trouble settling on their own nominee. Finally, Allison Lee, a former SEC enforcement official, was forwarded to the White House, according to published reports. The Trump administration has not acted, while the legislative calendar winds down quickly in advance of November's midterm elections. The confirmation process usually takes months."I'm one of many people who simply does not know why the ... Read full post

Jul 23, 2018, 3:54 PM EST

Democrats criticize SEC advice rule, push for fiduciary standard


By Mark Schoeff Jr.

Midterm elections usually don't generate the same energy as presidential elections, but this year is different because it is shaping up as a referendum on President Donald J. Trump.If Democrats take over the House — which many analysts see as a good possibility — and perhaps the Senate — a long shot — the outcome also could potentially affect the Securities and Exchange Commission's investment advice reform proposal.Over the last couple weeks, Democrats have made clear that they don't think the SEC has gone far enough. The latest example is a letter from three Senate Democrats, including Sen. Elizabeth Warren of Massachusetts, urging the Financial Industry Regulatory Authority Inc. to weigh in on the SEC's recommendations. They asserted that the way Finra interprets and enforces the SEC's proposal to raise broker standards would determine whether such a rule increases investor protection.In their letter, the ... Read full post

Jul 19, 2018, 1:50 PM EST

Behind closed doors: The big problem with how the SEC is getting insights from investors


By Mark Schoeff Jr.

Usually when I receive a news release about an upcoming event on my beat that's occurring at at the Securities and Exchange Commission, I put it on my coverage calendar and just show up.Something moved me to register for the recent investor roundtable at the SEC's headquarters in Washington. Good thing I did. It saved me a futile trip.It turns out that I wasn't welcome at the July 12 session because it was closed to the media. The audience for the approximately one-hour event was about two dozen people who use a financial adviser. The SEC assembled them to discuss the investment-advice reform proposal that is open for public comment until Aug. 7.Specifically, the investors responded to the disclosure portions of the proposal, which are designed to help them understand the differences between investment advisers and brokers in terms of standards of care and methods of compensation.With the biggest regulatory change in investment advice... Read full post

Jun 22, 2018, 1:38 PM EST

Hillary Clinton would have saved the DOL fiduciary rule


By Mark Schoeff Jr.

By fall 2016, I had pretty much given up trying to get an answer from Donald J. Trump's presidential campaign about its position on the Labor Department's fiduciary rule.Then in October, I saw Anthony Scaramucci in the lobby of the Mayflower Hotel in Washington. Mr. Scaramucci had just moderated a panel at a securities conference I was covering. I knew Mr. Scaramucci was a fundraiser for Mr. Trump, so I sidled up to him and asked what the campaign thought of the DOL rule. He promised Mr. Trump would "repeal" it.Whatever, I thought. The chances of Mr. Trump being elected were remote, right? A couple weeks later, Mr. Trump stunned almost everyone by beating Democratic presidential nominee Hillary Clinton. Although Mr. Trump couldn't "repeal" the Obama-era DOL rule, it is now dead thanks to his administration's giving up the fight to protect it in court. On Thursday, the U.S. 5th Circuit Court of Appeals issued a mandate confirming its... Read full post

Jun 19, 2018, 5:43 PM EST

Should investment advisers be put on a pedestal when it comes to advice standards?


By Mark Schoeff Jr.

During the endless battle over investment advice standards, one thing has remained fairly consistent: Investment advisers hold the high ground.They are elevated as the paragon of care because they must meet a fiduciary standard and act in the best interests of their clients. Brokers are held to a suitability standard that often is described as less stringent because it allows them more leeway to recommend high-fee products that put money into their own pockets."Sometimes in the debate, to simplify it, you hear: Advisers good — brokers bad," Ira Hammerman, executive vice president and general counsel at the Securities Industry and Financial Markets Association, told members of the Securities and Exchange Commission's Investor Advisory Committee on June 14 in Atlanta.The IAC's agenda was dominated by the SEC's investment advice reform proposal, which is open for public comment until Aug. 7. Among other things, the proposal seeks... Read full post

Jun 1, 2018, 5:51 PM EST

5th Circuit mandate to vacate DOL fiduciary rule 'still pending'


By Mark Schoeff Jr.

As death watches go, the vigil over the Labor Department's fiduciary rule has been a long one.Back on March 15, the 5th Circuit Court of Appeals struck down the regulation in a 2-1 decision. The Department of Justice, on behalf of the DOL, declined to appeal the decision by the April 30 deadline. Attempts by AARP and three states to intervene as the defendants were denied on two different occasions in May.The court was originally supposed to issue a mandate by May 7 making the March 15 decision effective, but has not yet done so. When a pope passes away, a Vatican official pounds on his chest three times. If he doesn't respond, he's officially declared dead. If someone were to pound the DOL rule's chest three times today, the regulation would at least give a weak cough.The parts of the rule that were implemented almost a year ago — impartial conduct standards for brokers when working with clients in retirement accounts —... Read full post

May 3, 2018, 2:58 PM EST

As curtains close on DOL fiduciary rule, SEC advice rule takes center stage


By Mark Schoeff Jr.

It's appropriate that the likely demise of the Labor Department's fiduciary rule occurred during the same week that Tony Award nominations were announced.A day after the productions and performers competing for Broadway's top honors were revealed, the 5th Circuit Court of Appeals denied efforts by AARP and three states to defend the DOL regulation in court. Just like that, the DOL is likely to relinquish its long-running lead-actor status in investment-advice reform and be relegated to a supporting role — or maybe even the chorus. When the Department of Justice, acting on behalf of the DOL, failed to appeal the March 15 split decision by a 5th Circuit panel to vacate the rule, it was up to the outside intervenors to save the rule. It looks as if they've failed to do so. Even more unlikely is a DOJ appeal to the Supreme Court, which must be filed by June 13.Now attention turns to the Securities and Exchange Commission, which... Read full post

Apr 17, 2018, 12:11 PM EST

SEC advice proposal unveiling: Here's what to expect


By Mark Schoeff Jr.

After many years of study and internal debate, the Securities and Exchange Commission is set to make a momentous advance Wednesday in setting investment advice standards. The five-member SEC is scheduled to vote Wednesday afternoon on whether to propose a rule package consisting of a disclosure document for registered investment advisers and brokers that summarizes their relationship with investors, a rule that sets a broker advice standard, and an "interpretation" of the standard of conduct for investment advisers.The fact that the package will see the light of day marks a significant milestone for an agency that has been wrestling with the advice issue for decades, and was given authority to propose a rule nearly eight years ago by the Dodd-Frank financial reform law. "Chairman Clayton is poised to do what none of his predecessors has done, which is get a proposal out the door," said Barbara Roper, director of investor protection at... Read full post

Apr 10, 2018, 3:00 PM EST

'Best interests' and 'fiduciary' aren't the same, so which will the SEC choose?


By Mark Schoeff Jr.

We're now into the second quarter of the year, and everyone involved in the debate over investment advice standards is eagerly awaiting the Securities and Exchange Commission's fiduciary rule proposal.Oops. Like Britney Spears, I did it again. I referred to the pending SEC rule using the term "fiduciary." As sources have pointed out to me, the SEC proposal may not emphasize that word — or even mention it much.Part of the definition of "fiduciary" is to be legally bound to act in another person's "best interests." But the SEC proposal could hinge on how the agency defines best interests."That's the $1 million question," said Knut Rostad, president of the Institute for the Fiduciary Standard. Investment advisers are currently held to a fiduciary standard of care, while registered representatives must adhere to a suitability standard. The latter requires that investment products meet the objectives and risk tolerance of a customer, ... Read full post

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