The last couple of weeks has seen some tumultuous statements out of the SEC. We became worried last week when two new appointees to key SEC positions did not say the fiduciary rule was on the regulator’s priority list. However, SEC chief Clayton has restated his plans to create a universal fiduciary rule. That said, he characterized creating one as a “herculean task”, acknowledging the difficulty in creating such a rule. Amidst all this back and forth, he has given away what could be considered a “hint” that industry might like the forthcoming rule. He has been adamant about preserving investor choice, which is taken to mean that the SEC may favor a less-restrictive disclosure-based rule.
FINSUM: We suspect the SEC will eventually come up with a universal fiduciary framework, and we likewise believe it will be both effective and disclosure-based.