Each week we’re giving you our weekly report highlighting the top compliance news articles from various industry news publications. We have selected the most relevant and important news articles related to registered investment adviser (“RIA”) compliance and regulatory issues. This week’s recap focuses on the latest on the Department of Labor (“DOL”) fiduciary rule as the June 9 applicability date has arrived. Check back each week for the latest list of top stories.
Here’s our top investment adviser compliance articles for the week of June 3, 2017:
- Fiduciary FAQ: What the Latest Milestone Actually Means (Author- Andrew Welsch, Financial Planning)
Financial Planning’s Andrew Welsch discusses the key provisions of the rule that are set to take effect on June 9 and clarifies what exactly the industry can expect to happen, when it takes effect, and when clients will be informed of it. Welsch claims the Securities and Exchange Commission (“SEC”) and the DOL “have indicated that they may change the regulatory framework once again.” Secretary Alexander Acosta declined to delay the rule’s already delayed applicability date but agreed to have the department continue to review the regulation and coordinate with the SEC.
- Buried in 11th Hour FAQs, Alexander Acosta Finally Zaps ‘Warranties’ From the DOL Fiduciary Rule–At Least for June 9 Implementation (Author- Brooke Southall, RIABiz)
In the weeks leading up to the June 9 applicability date, there has been some uncertainty as to whether RIAs would need to provide a written fiduciary statement beginning on the applicability date. Jason Roberts, one of our top 5 DOL fiduciary rule experts to follow, notes that “until the DOL published the frequently-asked-questions document last week, those anti-conflict policies were set to apply as early as June 9.” However, the DOL FAQs do confirm that the requirement to provide a warranty or fiduciary statement has been delayed until January 1, 2017. Brooke Southall also confirms that, “suddenly and in an unexpected way, Alexander Acosta has killed off the fear that warranties’ anti-conflict policies and procedures would need to be in place by June 9 — for now.”
- Interesting Angles on the DOL’s Fiduciary Rule #50 (Author- Fred Reish, Fredreish.com)
Fred Reish, one of our top 5 DOL fiduciary rule experts to follow, published his 50th article about his observations on the DOL fiduciary rule. In this particular article, he discusses the DOL’s latest enforcement memorandum and FAQ document. Reish informs that the FAQs are titled, “Conflict of Interest FAQs (Transition Period).” FAQ question #6 is a topic in this article that Reish discusses in detail to further explain the language and the “significant issues for broker-dealers and RIA firms” it may have. He suggests during the transition period, “the broker-dealers and RIAs need to think about the policies, procedures, compensation practices and supervision that will appropriately manage the risk.”
- DOL Takes First Step Toward Fiduciary Rule Changes (Author- Melanie Waddell, ThinkAdvisor)
Melanie Waddell, Think Advisor reporter, informs, “The Department of Labor released Wednesday morning a request for information seeking public input on potential further changes to its fiduciary rule, which takes effect Friday.” Labor Secretary Alexander Acosta believes this is necessary in order for the administration to use the data gathered to decide how to proceed with the rule. Acosta claims, “this is the first step in the administration’s review of that rule.” Given this latest development, there still appears to be a strong likelihood that the fiduciary rule is further modified in the coming months.
- SEC Criticized For Rekindling Fiduciary Fight (Author- Dan Jamieson, Financial Advisor)
Financial Advisor’s Dan Jamieson reports on the criticism the SEC is currently facing due to the “long-running fiduciary standard debate.” After SEC chairman Jay Clayton asked for public opinion on the fiduciary rule and its coordination with the DOL, he was immediately criticized by Barbara Roper, director of investor protection for the Consumer Federation of America. She claims his request, “looks like a ploy to give the DOL an excuse for indefinitely delaying the January 2018 implementation date.” On the other hand, SIFMA chief executive, Kenneth Bentsen, looks “forward to working with him on the creation of a best interest standard that protects all retail investors.” While opinions differ from both sides of the spectrum, the future of the rule is still unknown.
Don’t forget to check out last week’s top RIA compliance news articles on the DOL fiduciary rule. Be sure to check back next Friday for next week’s top articles!