A discussion draft of proposed legislation sponsored by Rep. Ann Wagner, R-MO., would stamp out theLabor Department’s fiduciary rule and itsattending prohibited transaction exemptions.
It would also amend the Securities Exchange Act of 1934 toinclude a best interest standard of care for brokers advisinginvestors in the retail market.
An investment recommendation would satisfy the best intereststandard if it reflected “reasonable diligence” on the part of thebroker, the definition of which would be modeled on FINRA'sexisting definition, and reasonable “care, skill, and prudence,”based on a customer’s individual investment needs, according tolanguage in the draft.
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