Welcome back to Human Capital! I’m Melanie Waddell in Washington. Industry attorneys recently highlighted three priorities for advisors and broker-dealers to brace for as the new year takes hold: Regulation Best Interest’s impending June 30 enforcement date, an ongoing Securities and Exchange Commission sweep of 403(b) sales to teachers, as well as regulations that are needed to implement the Setting Every Community Up for Retirement Enhancement Act of 2019, or the Secure Act.
The “next area of focus” for the Securities and Exchange Commission’s Retail Strategy Task Force, housed within the agency’s enforcement division, is sales of 403(b) plans to teachers, said James Lundy, partner in Faegre Drinker Biddle & Reath’s Chicago office, on the firm’s recent Inside the Beltway webcast.
(Faegre Drinker launched global operations Feb. 1. Faegre Drinker combines Faegre Baker Daniels, an international law firm, and Drinker Biddle & Reath, a full-service national law firm.)
As to the Secure Act, regulations and guidance are needed for some areas of the sweeping bill — namely for pooled employer plans, or PEPs, as well as annual lifetime income projections. But the release of these could be hampered by the November presidential election.
Keep scrolling to read more about these issues and Reg BI compliance.
Thanks for joining me for another year in which we’ll pull back the curtain on the people shaping the financial services regulatory landscape. You can reach me at mw[email protected], and follow me on Twitter at Think_MelanieW.
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The 403(b) plan sales sweep is the “next phase” of the SEC’s focus on Main Street issues, after the agency resolving “some matters” under the Share Class Selection Disclosure Initiative (SCSD), Lundy said.
SEC Chairman Jay Clayton said last year that the agency-wide Teachers Initiative was to be led, in part, by the enforcement division’s Retail Strategy Task Force, which has an “increased incentive in trying to bring cases in particular areas that are priorities for the commission,” according to Lundy.
Co-enforcement chief Stephanie Avakian detailed in November the agency’s probing of the administration of teacher retirement plans, another area “where there may be undisclosed conflicts of interest,” particularly regarding fees and lower-fee alternatives.