New York
21 April 2017
Reporter: Stephanie Palmer

DTCC pushes ahead with best-interest standards despite regulatory delay


The Depository Trust & Clearing Corporation (DTCC) Wealth Management Services (WMS) business will go ahead with new capabilities to meet the US Department of Labor’s mandatory best-interest standards for retirement savings, despite the department delaying implementation of the standards.

The WMS business has developed new features and service improvements intended to help with disclosure and sharing of commission schedules, fees and expense data, as required under the new standards, which were scheduled to come into effect on 10 April.

Following the change in the US administration in January, the Department of Labor (DOL) opted to delay the rule for at least 60 days. According to DTCC, it is also possible that the requirements could be loosened.

However, DTCC has maintained it will still implement the changes to its services, saying there is a demand in the market for new ways to provide transparency to investors, whether this is mandated or not.

Ann Bergin, managing director of DTCC and head of WMS, said: “We made a commitment to ensure our clients would be prepared to meet fiduciary-related requirements in time for the target compliance date.”

She added: “Our clients want to expand disclosures and transparency now, and we’ve delivered those capabilities.”

The DOL’s mandatory best-interest standards were intended to reduce conflicts of interest in the retirement advisory business, and to discourage the use of high-cost, commission-based investment products.

In their current form, the standards require any advisor providing covered investment advice to maintain a particular fiduciary standard, making investment recommendations that are in the clients’ best interests.

They also require providers to disclose all fees, conflicts of interest and compensation from third-parties related to recommendations.

Advisors offering commission-based products must also adhere to additional disclosures around best-interest contract exemption.

Changes to the WMS capabilities include new features and service improvements to help with disclosure of the required data, helping clients of insurance and retirement services, mutual fund services, and alternative investment product services to comply with the standards when they are implemented.

According to DTCC, the new services also address investor demand for more information about fees and expenses incurred on their investments.

More regulation news
The latest news from Asset Servicing Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Eurex to offer MiFID II simulations ahead of January deadline
08 September 2017 | Frankfurt | Reporter: Drew Nicol
Eurex is set to offer its clients access to a simulation trading environment later this month ahead of the MiFID II January deadline
CFTC extends position limit relief to two years
14 August 2017 | Washington DC | Reporter: Mark Dugdale
The CFTC will not enforce certain position aggregation requirements until 12 August 2019
First MiFID II position limits are set
14 August 2017 | Brussels | Reporter: Mark Dugdale
Proposed position limits on rapeseed, corn and milling wheat set in France are consistent with the objectives established in MiFID II
US regulators to work together on Volcker Rule
28 July 2017 | Washington DC | Reporter: Stephanie Palmer
Five US federal financial regulatory agencies are coordinating the efforts to review the regulatory treatment of certain foreign funds under Section 619 of the Dodd-Frank Act, better known as the Volcker Rule
FCA consults on SMR extension
26 July 2017 | London | Reporter: Stephanie Palmer
The UK’s Financial Conduct Authority (FCA) has outlined its proposals for extending the Senior Managers and Certification Regime to almost all regulated financial services firms
Clearstream sets sights on CSDR licence
17 July 2017 | Frankfurt | Reporter: Drew Nicol
Deutsche Börse subsidiary Clearstream is set to apply for new licenses to operate under the central securities depositories regulation
Fend off reform fatigue, urges FSB
06 July 2017 | Hamburg | Reporter: Mark Dugdale
The Financial Stability Board has called on the leaders of G20 nations to fend off reform fatigue and continue to work together
More regulation news