While the 35-day partial government shutdown “really slowed progress” at the Securities and Exchange Commission, the agency will issue its final advice-standards package, including the controversial Regulation Best Interest, likely in the 3rd quarter, according to Neil Simon, vice president of government relations at the Investment Adviser Association. “It’s going to happen.”
Speaking at the TD Ameritrade National LINC conference in San Diego Friday morning, Simon said that the Washington rumor mill also has House Financial Services Committee Chairwoman Maxine Waters, D-Calif., holding a March hearing to grill SEC Chairman Jay Clayton on the upcoming advice-standards plan.
Reg BI under the three-pronged SEC package is “pretty broker friendly” and “pretty ambiguous in spots,” Simon said, with the scope of Reg BI being “questionable” in that “it’s episodic when somebody is talking to a broker about investment advice then they would have to wear that Regulation BI hat, but when they’re not then they could put on their broker hat.”
The Reg BI plan also “doesn’t deal with dual registrants,” Simon said. “There are a lot of dual registrants out there; it really doesn’t deal with them cleanly.”
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As for the plans’ Customer Relationship Summary disclosure form, or Form CRS, “it’s a mess,” Simon said. “I think there’s going to be a lot of negotiation” among the SEC Commissioners on CRS.
With the states now moving on their own fiduciary rules, with Maryland’s “ambitious” proposal being released Monday, the patchwork state plans “will make compliance very, very complicated,” Simon added.