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DOL Fiduciary News: September 27, 2018

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New Jersey fiduciary rule could be first of many among states post-DOL

InvestmentNews; Sep 26, 2018 @ 3:03 pm

New Jersey's push for a fiduciary rule governing brokerage firms in the state could be the first of many similar rules issued by other states following the death of the Department of Labor's fiduciary regulation earlier this year.

New Jersey Governor Phil Murphy announced a forthcoming fiduciary regulation to be proposed and overseen by the state's Bureau of Securities last week. The rule would create a uniform fiduciary standard for both brokers and registered investment advisers. 


DOL Rule Is Dead, but Clean Shares Will Live On: Cerulli

ThinkAdvisor | September 25, 2018 at 03:14 PM

Clean shares that were devised to comply with the Labor Department’s fiduciary rule will live on despite the rule’s demise, Boston-based Cerulli Associates opines.

While clean shares have existed for some time, Labor’s fiduciary rule ushered in the advent of T shares (or “transactional” shares) and then share class Z, or “clean” shares — which were developed to allow level commissions that the broker could charge directly to the customer.

Cerulli notes in its report released Tuesday that these new share classes “were defined as a triple-zero or double-zero share class that would be designed specifically for the intermediary channel to address concerns over conflicts of interest.”

Now that Labor’s rule has been repealed, will the share class type “stick” within the intermediary channel? “There are reasons why it will,” the firm states. 


SEC advice rule falls short on investor protection, lawmaker asserts

InvestmentNews; Sep 26, 2018 @ 1:59 pm

A Democratic lawmaker asserted to a Securities and Exchange Commission official Wednesday that the agency's investment advice reform proposal falls short of the investor protections required by the Dodd-Frank financial reform law.

In a congressional hearing, Rep. Stephen Lynch, D-Mass., focused on the Dodd-Frank provision that authorized the SEC to impose a uniform standard of care for retail investment advice that is "no less stringent" than the fiduciary duty that currently governs investment advisers.

The SEC proposal maintains separate regulation for advisers and brokers, but includes a so-called Regulation Best Interest that is designed to strengthen the broker standard by requiring them to emphasize their clients' returns over their own compensation.