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SEC initiates comment period on fiduciary rule

Joe Mont | June 2, 2017

Among the many criticisms of the Department of Labor’s “fiduciary rule,” is that the Dodd-Frank Act, and many of those covered by the rule, anticipated that it would be the domain of the Securities and Exchange Commission.

The agency, many still argue, is better suited for the task and saw its regulatory oversight usurped by the Obama Administration and its Labor Department. Now, the first time, the SEC has announced it is entering the fray and Commissioner Jay Clayton has launched a new public comment process.

In April 2016, the Labor Department finalized a new rule that creates a fiduciary duty for brokers and registered investment advisers who offer retirement advice. It provides exemptions that, if applied for and granted, would allow these advisers to maintain fee-based arrangements. In general, fiduciaries are prohibited from receiving commissions, which are considered to present a conflict of interest. The new rule, however, creates a Best Interest Contract...

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