Rep. Byron Donalds, R-Fla., told Securities and Exchange Commission Chairman Gary Gensler that it's "come to Congress' attention" that the agency is considering amending or rewriting Regulation Best Interest — and warned the agency against doing so.
"There is no credible evidence to date that Reg BI is not working as intended, or that investor protections have been weakened as a result of Reg BI being in place," Donalds told Gensler Monday in a letter.
Gensler is testifying Tuesday morning before the House Financial Services Committee.
When asked by Rep. Ann Wagner, R-Missouri, during the hearing if the agency is mulling a rewrite of Reg BI, Gensler responded: "It's not on our unified [regulatory] agenda. We look to vigorously enforce it."
Donalds stated in the letter that "the deliberative and evidence-based approach taken by the SEC with Reg BI contrasted sharply with the anti-investor approach taken by the Department of Labor (DOL) in 2016 with its so-called 'fiduciary' rule."
Under Labor's rule, "it was estimated that nearly 7 million individual retirement account (IRA) owners would have lost access to investment advice, while over two-thirds of financial advisors stated they would have to stop providing advice to accounts under $25,000 due to the cost restrictions of the rule," Donalds wrote. "Fortunately for investors, the DOL rule was struck down by the courts."
Donalds continued: "It is telling that many of the same 'advocates' who actively supported the 2016 DOL rule are now calling on the SEC to amend Reg BI."
