What You Need to Know
- The SEC didn't define best interest when it enacted Reg BI.
- Defining best interest would place it at a higher standing, Aikin says.
- Labor said in mid-June that it plans to issue a proposed rulemaking to update the definition of fiduciary under ERISA.
Chairman Gary Gensler of the Securities and Exchange Commission may likely define “best interest,” according to Blaine Aikin, founder and principal of Fiduciary Insights, a Broadridge company.
The SEC did not do so when it enacted Regulation Best Interest in 2019.
“I think there’s an appetite for the Biden administration” to define best interest “and place it at a higher level of standing,” Aikin said on a recent Broadridge webcast. “We’ve had certain calls from many different audiences: ‘Wouldn’t it have been better if the SEC had actually defined best interest?’”
Gensler told lawmakers in early May that while the agency plans to “vigorously get the most” out of Reg BI, the agency will “constantly evaluate” how the rule is serving investors and it could be modified.
Aikin added that he believes there’s “huge collaboration” going on now between the Labor Department and the SEC regarding Reg BI and Labor’s upcoming new fiduciary rule.