SEC issues proposed fiduciary regulations

Proposed fiduciary regulations include a new fiduciary standard for broker-dealers

On April 18, 2018, the U.S. Securities and Exchange Commission (SEC) issued a set of proposed fiduciary regulations that includes a new fiduciary standard for brokerdealers. This follows the decision on March 15, 2018 by the Court of Appeals for the Fifth Circuit to overturn the Department of Labor’s (DOL) fiduciary rule.


We are encouraged that the SEC is taking leadership on this issue.  It is still early in the process and we have not completed a full review of the agency’s proposals.  However, our initial assessment is that they are principles-based, more workable and they avoid some of the unintended consequences of the former DOL rule, such as limiting consumer choice and access while increasing their costs. 


Among other things, the SEC’s proposed regulations establish a new standard of conduct requiring broker-dealers and their associates to act in the best interests of a retail customer when making a recommendation of any securities transaction or investment strategy that involves securities.  These recommendations must be made without placing the interests of the broker-dealer or its associates ahead of the customer.


Voya has always approached our business in the spirit of doing what is in the best interest of clients and customers, and we will continue to do so no matter how the final SEC regulations take shape.  As proposed, we do not believe they will have a significant impact on our defined contribution plan business.  For business conducted through our Voya Financial Advisors retail broker-dealer (including our Retirement Advisory Distribution channel), the changes we put in place for the DOL rule position us well to meet the SEC’s new requirements.  Regardless of their final form, we are confident in Voya’s ability to be an agile, effective competitor in the marketplace.


There will be a 90-day public notice-and-comment period beginning with the official publication of the proposals in the Federal Register.  Similar to our involvement during the DOL rule-making process, we plan to provide comments to the SEC and we will also be working closely with our industry associations to help shape this important dialogue.


Please note that these regulations are still in proposal form and are likely to change. In the meantime, we will continue to follow this matter closely and will keep you informed of any new developments.  If you have questions about this or any other Retirement business topic, we encourage you to reach out to your relationship management contact.


Thank you, again, for your partnership. Together, we are making a difference in the retirement outcomes for millions of Americans.