Originally published on Investment News by Knut Rostad
Reg BI rolled-out with bravado and fanfare on June 5. The SEC chairman spear-headed a two-hour presentation on two rules and two interpretations aimed at bringing “the legal requirements and mandated disclosures in line with reasonable investor expectations.”
In an open meeting, the chairman outlined the hurdles overcome — including interested parties “strident and divergent views” — to get to today. He applauded the expertise, experience and hard work of SEC staff, and cited dozens by name. The celebratory feeling of the staff was palatable, deserving of the achievement the chairman credited them with. Very nice, indeed.
John Taft is vice chairman of Baird and former chairman of the Securities Industry and Financial Markets Association. He’s the architect of SIFMA’s July 2011 blueprint for a best interest standard and lead the lobby group through the development of the Dodd-Frank legislation. Mr. Taft is a good sparring partner. We’ve taken opposing views on conduct standards since 2009, when our group said SIFMA’s standard fell short of an authentic fiduciary standard. SIFMA publically disagreed with our comment.
Mr. Taft is a veteran advocate for broker-dealers, arguably the most experienced B-D executive advocate in the country today, and so his opinions matter greatly in the B-D community.
His InvestmentNews piece on Reg BI makes a pretty big claim: that brokers are held to a higher standard than investment advisers because “disclosure of a financial conflict alone is not considered adequate under the rule.”
