Securities and Exchange Commission chairman Jay Clayton has outlined his plans for ensuring his agency’s proposed fiduciary rule is thoroughly scrutinized by the public.
Last week, the Commission proposed a rulemaking package that would: require broker-dealers to act in the best interest of their retail customers; reaffirm, and in some cases, clarify the fiduciary duty owed by investment advisers to their clients; and require broker-dealers and investment advisers to clarify for all retail investors the type of investment professional they are, and key facts about their relationship. The use of “adviser” and “advisor” as titles in certain circumstances may also be prohibited because they may mislead retail investors.
“This rulemaking is designed to serve our Main Street investors. It is intended to bring legal requirements and mandated disclosure in line with investor expectations,” Clayton said in a statement released on Thursday. After referencing a pre-proposal roundtable in St. Louis, he emphasized that “we need to continue that effort by reaching out directly to investors and other market participants across the country.”
Clayton said he has asked SEC staff to put together a series of roundtables, focused on the retail investor, to be held in different cities around the country—including in Atlanta, Denver, Houston, and Miami. “These roundtables are intended to help us gather much-needed information straight from those who will be most directly impacted by our rulemaking,” he said, adding that he plans to attend at least some of the sessions.
“These efforts are one component of a broad engagement effort on this issue,” Clayton said. Investors will be given the opportunity to weigh in on the rule “using a short, fillable form.” Concurrently, the SEC’s Investor Advocate is in the process of performing investor testing, the results of which will be made available in the public comment file.