WASHINGTON—United States Senators Bill Hagerty (R-TN), a member of the Senate Banking Committee, and Mike Rounds (R-SD) joined Representatives Ann Wagner (R-MO-02) and French Hill (R-AR-02) in sending a letter to Securities and Exchange Commission (SEC) Chair Gary Gensler demanding answers on the SEC’s misguided proposal that would harm broker-dealers, investment advisors, and Main Street investors.
“While it is promoted as an investor protection measure, the Proposal’s true intention seems to be rewriting existing and well-functioning SEC regulations, such as Regulation Best Interest (‘Reg BI’) and the fiduciary standard,” the members of Congress wrote. “This is likely to result in a burdensome, one-size-fits-all approach being imposed on all broker-dealers and investment advisers, irrespective of the technology they utilize. This new, untested standard would apply indiscriminately, whether or not firms provide personalized investment recommendations or advice to their customers….If the SEC’s goal is to replace Reg BI and the existing fiduciary standard with the Proposal’s heightened ‘best interest’ standard, it should be transparent and direct about its actions. It should not rely on the recent attention around predictive data analytics or artificial intelligence as a pretext. Furthermore, if the SEC intends to assume the role of a technology regulator, it should seek explicit authority from Congress.”
In May 2023, Hagerty raised concerns about the SEC’s increasingly pro-ESG, anti-free markets agenda that would hurt American investors.
Earlier this month, Hagerty also criticized Gensler for weaponizing the SEC beyond its Congressional mandate to target new technologies that expand access to American investors.
A copy of the letter can be found here.