The states should wait until the Securities and Exchange Commission's Regulation Best Interest is finalized before they move ahead with their own best-interest rules, SEC Commissioner Hester Peirce said Thursday.
"I do think it would be helpful to have a common [best-interest] standard," Peirce said during a question-and-answer session at the IAWatch compliance conference in Washington. "I urge people to take a look at the words of the [SEC best-interest standard], because I think when we first came out with Reg Best Interest, people just reacted to the fact that we didn't cleanly just take the fiduciary standard … But I think if people looked at the words of the standard closely, they'd see it as actually quite a strong standard."
In separate comments to ThinkAdvisor, Peirce said that it would be preferable in her view for the states to "see how [the SEC] rule comes out and then let's have a conversation about what, if anything else, needs to be done. Let's let our rule play out. The states' input is really important to us and I just hope they keep working with us in this process."
Peirce, who has complained previously about the "best interest" moniker, said that her "intention isn't a superficial" best-interest title.
"I want to create an environment in which investors ask questions and are skeptical," she said. "I want them to ask what they're paying for what they're getting … I've been an opponent of the fiduciary name as well because I think that label has also been used to tell people 'just find somebody who calls themselves a fiduciary and you'll be good to go.'"
Asked when the agency's three-pronged advice-standards package would be finalized, including the much-debated Reg BI, Peirce said "soon," and reiterated her previous comments that the rulemaking is a priority for SEC Chairman Jay Clayton and for her.
"I think it's an important rulemaking. It is a big undertaking," she said. "We did have a shutdown that did affect our rulemaking schedule, but it remains a priority and so I'm hopeful that it will get done soon."