It was simply a question of time before the brokerage said something regarding the endeavors by states to kill a controversial broker-conduct rule they find excessively frail. Presently they have.
Industry legal advisors are warning that the exertion by seven states and the District of Columbia to subdue the SEC's Regulation Best Interest is problematic to the broker-dealer industry, as indicated by FinancialAdvisorIQ.
The alliance of seven states ? New York, California, Connecticut, Delaware, Maine, New Mexico and Oregon ? and D.C. recorded the protest for explanatory and injunctive help against the SEC and its chairman, Jay Clayton. The claim was recorded Monday at the U.S. Locale Court of the Southern District of New York.
The claim puts the industry in a difficult position, Richard Kerr, a Boston-based accomplice at law firm K&L Gates, told FinancialAdvisorIQ. The compliance deadline for Regulation Best Interest will come quickly and any uncertainty with respect to the validity of the rule will put broker-dealers in a precarious place in much the same way the challenge to the DOL fiduciary rule did..
The requirement of Reg BI incorporates a transition period until June 30, 2020 to give firms sufficient time to come into compliance.
Reg BI ? which was endorsed in June ? requires broker-dealers to act to the greatest advantage of their retail clients when making a recommendation of any protections exchange or investment methodology including protections. Be that as it may, regardless of whether the new rule without a doubt puts the investors' advantages first remains the subject of intense discussion.
For the time being, the claim adds to the tremendous uncertainty the broker-dealer industry has confronted around the proper standard of care for years now, as per New York-based legal lawyer Jonathan Brennan.