(March 2021)

One big anxiety that has been on every broker’s mind since mid-January is: is the SEC going to make Reg BI compliance tougher, or introduce something even worse? A lose-lose. Accordingly, there has been a lot of focus on what newly nominated SEC chief Gary Gensler might do to the rule. The Biden administration and the Democratic party have been quite vocal in their desire to replace the rule with a full fiduciary rule, but will that happen, and when? Well, the reality is that the meme stock craziness is likely one of the best things that could have happened to brokers. You may be asking why: because it likely just distracted the new leadership of the SEC for about a year. The meme stock frenzy has dominated headlines and become a Democratic cause, which means newly nominated SEC chief Gensler will likely be focusing on that immediately upon taking over. Bitcoin is another emerging issue given the huge run-up in prices and public focus. Reg BI is obviously very important, but may become second fiddle because of the other, more newsworthy issues.


FINSUM + Magnifi: The public outcry over how the meme stock frenzy played out—including Robinhood’s behavior—means the SEC is going to have to deal with that first, and it is not a small issue that can easily be solved. 


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