The Department of Labor recently stated that the applicability date for what is commonly referred to as the "Fiduciary Rule" would be June 9, 2017.[1]  The Department also stated that it intended to issue a Request for Information regarding various aspects of its Fiduciary Rule.[2]  In connection with these actions, Secretary Acosta stated his desire that the Department of Labor and the Securities and Exchange Commission ("SEC" or "Commission") engage constructively as we each pursue our ongoing analyses of the standards of conduct applicable to investment advisers and broker-dealers when they provide investment advice to retail investors.[3]

The Department of Labor's Fiduciary Rule may have significant effects on retail investors and entities regulated by the SEC.  It also may have broader effects on our capital markets.  Many of these matters fall within the SEC's mission of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation.

I welcome the Department of Labor's invitation to engage constructively as the Commission moves forward with its examination of the standards of conduct applicable to investment advisers and broker-dealers, and related matters.  I believe clarity and consistency — and, in areas overseen by more than one regulatory body, coordination — are key elements of effective oversight and regulation.  We should have these elements in mind as we strive to best serve the interests of our nation's retail investors in this important area.

I look forward to working with my fellow Commissioners, the SEC staff, retail investors, and other market participants in assessing these matters, as well as the range of potential Commission actions and their expected effects.  Given the significance of these issues — in particular, for retail investors looking to save for the things that matter most to them, including homeownership, education, and retirement — I look forward to robust, substantive input that will advance and inform the SEC's assessment of possible future actions.

The SEC has been reviewing this area for some time, including through the RAND study of investor perspectives commissioned in 2006,[4] the Dodd-Frank Act Section 913 staff study conducted in 2010-2011,[5] and, most recently, a solicitation of data and other information in 2013.[6]  These efforts illustrate the complexity of the issues as well as the fast-changing nature of our markets, including the evolving manner in which investment advice is delivered.  The range of potential actions previously suggested to the Commission is also broad, from maintaining the existing regulatory structure, to requiring enhanced disclosures intended to mitigate reported investor confusion, to the development of a best interests standard of conduct for broker-dealers, and, finally, to pursuing a single standard of conduct combined with a harmonization of other rules and regulations applicable to both investment advisers and broker-dealers when they provide advice to retail investors — and a variety of points in-between.

Significant developments in the marketplace since the Commission last solicited information from the public in 2013 include financial innovations, changes to investment adviser and broker-dealer business models, and regulatory developments — including the issuance and pending applicability of the Department of Labor's Fiduciary Rule.  In light of these developments, I believe an updated assessment of the current regulatory framework, the current state of the market for retail investment advice, and market trends is important to the Commission's ability to evaluate the range of potential regulatory actions.

To facilitate that assessment, and consistent with prior practice followed in other areas of importance to the public and the Commission, including with respect to regulatory initiatives under the Dodd-Frank Act and under the JOBS Act,[7] a webform and e-mail box are now available for members of the public to make their views on these issues known publicly in advance of any future Commission action.  In this regard, public views on the following questions, as well as other information the public believes to be relevant to these issues and the Commission's consideration of potential future actions, are welcome:

In addition to specific suggestions for any potential action, I invite you to submit data and other information that may inform the Commission's analysis, including data covering periods since the Commission's 2013 solicitation.

Members of the public interested in making their views known on these or other related matters, even before official comment periods may be opened, are invited to submit those views via the webform or e-mail address linked below.  To the extent that you are responding to a particular question(s) above, please identify such question(s) in your submission.  Members of the public who wish to submit comments on any future rulemaking should submit comments during the official comment period, if applicable, that would start with the notice of the initiative published in the Federal Register.

The Commission will post submissions on the Commission's Internet website.  Submissions received will be posted without change; the Commission does not edit personal identifying information from submissions.  You should only make submissions that you wish to make available publicly.  Because of this, if you have confidential data or other information on any of the subjects above that you wish to share with the Commission, you should submit that information in an aggregated or similarly anonymized format.

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[1] The Fiduciary Rule comprises a final rule (Department of Labor, Definition of the Term "Fiduciary"; Conflict of Interest Rule — Retirement Investment Advice, 81 FR 20946 (Apr. 8, 2016)) and various prohibited transaction exemptions newly adopted or amended at the same time.  On May 22, 2017 the Department of Labor and the Department of the Treasury issued formal non-enforcement policy statements regarding the Fiduciary Rule.  Department of Labor, Field Assistance Bulletin No. 2017-02, Temporary Enforcement Policy on Fiduciary Duty Rule (May 22, 2017); Department of the Treasury, Announcement 2017-4, Non-Applicability of Excise Taxes Under Section 4975 To Conform With DOL Temporary Enforcement Policy on Fiduciary Duty Rule (May 22, 2017).  The Department of Labor also issued a guidance document to provide compliance assistance to affected parties.  Department of Labor, Conflict of Interest FAQs (Transition Period) (May 2017).

[2] See Field Assistance Bulletin No. 2017-02, supra note 1.

[3] Alexander Acosta, Deregulators Must Follow the Law, So Regulators Will Too, Wall St. J. (May 23, 2017), at A19.

[4] Angela A. Hung, et al., RAND Institute for Civil Justice, Investor and Industry Perspectives on Investment Advisers and Broker-Dealers (2008).

[5] Staff of the U.S. Securities and Exchange Commission, Study on Investment Advisers and Broker-Dealers As Required by Section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Jan. 2011) (the "Study").  The views expressed in the Study were those of the staff and do not necessarily reflect the views of the Commission or the individual Commissioners.  See also Statement by SEC Commissioners Kathleen L. Casey and Troy A. Paredes (Jan. 21, 2011) (opposing the Study's findings and, among other things, stating that "stronger analytical and empirical foundation than provided by the Study is required before regulatory steps are taken that would revamp how broker-dealers and investment advisers are regulated").

[6] Rel. No. 34-69013, Duties of Brokers, Dealers, and Investment Advisers (Mar. 1, 2013), available at https://www.sec.gov/rules/other/2013/34-69013.pdf.

[7] See Public Comments on SEC Regulatory Initiatives Under the JOBS Act, at https://www.sec.gov/spotlight/jobsactcomments.shtml; Public Comments on SEC Regulatory Initiatives Under the Dodd-Frank Act, at https://www.sec.gov/spotlight/regreformcomments.shtml.

[8] See supra note 6.

[9] Public comments received in response to Rel. No. 34-69013, supra note 6, will also be considered in connection with any rulemaking under Section 913 of the Dodd-Frank Act.