The 5th Circuit Court of Appeals ruling issued Thursday torpedoing the Labor Department’s fiduciary rule isn’t impeding the Securities and Exchange Commission’s efforts to write its own fiduciary rule, the agency’s chairman, Jay Clayton, said Monday.
“Seventy-two hours later” after the 5th Circuit Court of Appeals struck down Labor’s fiduciary rule, “it hasn’t affected the way I’m approaching this” fiduciary rulemaking at the SEC, Clayton said during a question-and-answer session at the Securities Industry and Financial Markets Association’s annual compliance conference, held in Orlando, Florida.
Ken Bentsen, president and CEO of SIFMA, queried Clayton on how soon the agency would release its own fiduciary proposal, asking if it would be “soon.”
Clayton responded: “Soon is fair. From my perspective, the sooner the better. I’m not sitting on this.”
Bentsen asked, does the 5th Circuit decision “affect [the SEC’s] timing” on releasing its own fiduciary rule?
“I think there’s a lot going on there [in the ruling] for what it means for the Department of Labor,” Clayton replied. “I haven’t had any discussions with the Department of Labor on what it means from a broader perspective of administrative law and the approach to administrative law. We’ll see, but as far as I’m concerned, we’re moving forward.”
A Labor Department spokesperson said in a statement that with the 5th Circuit vacating the 2016 fiduciary rule in its entirety, “pending further review, the Department will not be enforcing the 2016 fiduciary rule.”
The U.S. Court of Appeals for the 5th Circuit voted 2-1 on Thursday to vacate the Labor Department’s fiduciary rule.
The nine plaintiffs in the 5th Circuit case included the U.S. Chamber of Commerce, the Securities Industry and Financial Markets Association and the Financial Services Institute.