Legislative Activity

Congressional Republicans Place DOL’s Fiduciary Rule in Crosshairs

Last week, on April 19, just one day after Senate Republicans introduced a resolution to disapprove and nullify the Department of Labor’s (DOL) Fiduciary Rule, House Republicans introduced a companion resolution also targeting the rulemaking. Two days later, on April 21, the House Education and the Workforce Committee marked-up and approved the resolution along party lines by a vote of 22-14. This week, on Thursday, April 28, the full House is expected to vote on and pass the resolution. Nevertheless, President Obama has indicated that he will veto any such legislation.

Note too, these resolutions are in addition to other bills introduced earlier this year that would disapprove of DOL’s Fiduciary Rule and replace it instead with a congressionally-mandated fiduciary standard. Specifically, H.R. 4293/S. 2502, Affordable Retirement Advice Protection Act, would amend the Employee Retirement Income Security Act of 1974 (ERISA) and H.R. 4294/S. 2505, Strengthening Access to Valuable Education and Retirement Support Act, would amend the Internal Revenue Code (Code). While both bills in the House have been marked-up at the committee level (House Education and the Workforce and House Ways and Means, respectively) and are awaiting a vote by the full House, neither Senate bill has been marked-up – nor has a markup been scheduled.

Importantly, facing mounting pressure from lawmakers and industry, Securities and Exchange Commission (SEC) staff have reportedly submitted a draft Fiduciary Rule to SEC Commissioners for review. This comes as the Commission has two vacant commissioner positions that have nominees pending congressional approval. However, following the recent Senate Banking Committee meeting on these and other nominees during which it became clear that there is less than overwhelming support for the nominees and the vote was postponed, no further nomination votes have been scheduled.

As May Deadline Looms, Lawmakers Still Negotiating Puerto Rico Fix

After postponing a markup of H.R. 4900, Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), last week passed without a clear, unified solution to address the Commonwealth’s fiscal crisis. However, while a markup has yet to be scheduled this week, it appears that Republicans and Democrats are making advances towards coming together on a solution, including on the scope of the restructuring authority, the breadth of powers given to the fiscal oversight board, and potentially on other issues, including the need for economic and other incentives. With the Treasury Department working closely with Congress, it appears likely that a solution will be agreed upon in the near-term, though doing so by Speaker Paul Ryan’s (R-WI) May 1 deadline is growing increasingly unlikely.

This Week’s Hearings:

• Wednesday, April 27: The House Financial Services Subcommittee on Monetary Policy and Trade will hold a hearing titled “How Can the U.S. Make Development Banks More Accountable?”

• Thursday, April 28: The House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit will hold a hearing to review the impact of capital margin requirements on end-users.

Regulatory Activity

SEC to Meet, Hold Meeting of Equity Market Structure Advisory Committee

On Tuesday, April 26, the SEC will hold a meeting of its Equity Market Structure Advisory Committee to discuss the: (1) Regulation National Market System (NMS) Subcommittee recommendations to the Committee regarding the framework for potential access fee pilot; (2) Trading Venues Regulation Subcommittee recommendations to the Committee regarding recommendations relating to trading venues regulation; (3) Market Quality Subcommittee status report to the Committee; and (4) Customer Issues Subcommittee status report to the Committee.

Additionally, on Wednesday, April 27, the SEC will meet to discuss whether to publish for comment a proposed NMS plan to create, implement, and maintain a consolidated audit trail (CAT), submitted pursuant to Rule 613 of Regulation NMS.

CFTC to Hold Meeting of Market Risk Advisory Committee

On Tuesday, April 26, the Commodity Futures Trading Commission (CFTC) will hold a meeting of its Market Risk Advisory Committee to discuss how derivatives markets are currently functioning, including the impact and implications of the evolving structure of these markets on the movement of risk across market participants.

FDIC to Meet on Incentive-Based Compensation Arrangements and Deposit Insurance Assessments

On Tuesday, April 26, the Federal Deposit Insurance Corporation (FDIC) will meet to discuss: (1) a notice of proposed rulemaking for incentive-based compensation arrangements; and (2) deposit insurance assessments for small banks.