PROVIDENCE – A public interest group is calling for the Securities and Exchange Commission to release all records related to investor testing that the agency has reportedly been conducting in connection to a proposed set of rules for financial advisers.
Better Markets, a nonprofit group promoting the public’s interest in the financial markets, has filed a request under the Freedom of Information Act for the SEC to disclose details about any investor testing related to the so-called “Regulation Best Interest and Form CRS [customer/client relationship summary]” proposal.
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“The public has a right to know, before these important rule proposals become final, what investor testing has been done by the SEC and what it shows about the proposals,” said Stephen Hall, legal director and securities specialist for Better Markets.
“Will the [proposed] disclosure requirements confuse investors even more, as other independent testing indicates, or will they really help explain the duties that different types of advisers owe their clients?” Hall said. “And why was the testing conducted after the rule was written, instead of beforehand?”
No matter what the testing shows, he said, the SEC should overhaul its proposals to ensure they provide a strong and simple standard that requires all financial advisers to put their clients’ best interest first.
“The American people have been promised that the SEC’s proposed ‘best interest’ rule would protect investors from the powerful conflicts of interest that siphon away billions of dollars of their hard-earned savings every year,” Hall said.
“No rule can achieve that goal with even the best disclosures,” he added. “But at a minimum, the rule shouldn’t make matters worse with disclosures that investors won’t read or understand. As time marches on and the proposal gets closer to final form, the public is entitled to know how good – or bad – those disclosure provisions really are.”
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.
