As part of a larger package, the Securities and Exchange Commission this week adopted the new “Regulation Best Interest,” which requires that stock broker/dealers act in their customers’ “best interest,” a term that is not defined.
“By calling this Regulation Best Interest, (Chairman) Jay Clayton and the SEC have gone full Orwell on us,” Dougherty said. “This regulation does not require your broker to act in your best interest the way a doctor or lawyer does. You still need to treat your broker as a used-car salesman who might pull a fast one on you.”
Cancelling America’s student debt would lift enormous burdens for the over 44 million Americans with student loans. But it would also boost the economy for EVERYONE, whether they have loans or not.
Today, the SEC finalized a rule that will allow financial professionals to claim they are required to act in investors’ best interests. But “Regulation Best Interest” falls far short of what ordinary investors need to ensure they don’t fall prey to self-interested advice.
Following the SEC meeting, Americans for Financial Reform will host a conference call with guest SEC Commissioner Robert Jackson. AFR and other groups have criticized the commission’s plan on investment advice for leaving ordinary Americans vulnerable to harmful industry practices. The call will include the AFL-CIO, AARP, and the Consumer Federation of America.
Today’s hearing addresses the financial stability and economic risks of the growth of leveraged lending to non-financial businesses. The rapid growth and poor underwriting of high-risk corporate debt is clearly a significant current threat to financial and economic stability.
24-Group Organizational letter on the need to collect data on Opportunity Zone tax break that could reduce affordable housing options, displacing lower-income families of color.
AFR Education Fund comment on the need to collect data on Opportunity Zone tax break that could reduce affordable housing options, displacing lower-income families of color.
Letter to HUD asking for delay of ANPR until note sale data is released
Do not be deceived by the label. The so-called “best interest” standard doesn’t require brokers to do what’s best for their customers. It will not require them to recommend the investments they reasonably believe are the best match for the customer, and it will not require them to consider costs except when comparing otherwise identical securities. That’s why state securities regulators have warned that the proposal “subverts,” rather than protects, investors’ best interests.