The Fiduciary Standard: It\u27s Not What It Is, But How It\u27s Made, Measured, and Decided

(Excerpt) This Article addresses the SEC’s fiduciary rulemaking under Section 913 of the Dodd-Frank Act, but takes a step back from the debate to frame the discussion in a more holistic context. This author’s previous article on the fiduciary standard discussed how the implementation of a fiduciary duty is largely contextual; a variety of factors other than the scope and substance of the fiduciary duty are proximately related to achieving the social benefits that the fiduciary duty is intended to create. Achieving these benefits may depend on, among other things: (1) the limiting of “investment advice” to advice regarding securities, as opposed to, for example, insurance and banking products; (2) the private venues that are available to enforce this right, for example, arbitration, or state or federal court; (3) the conduct standards imposed under non-securities regulatory regimes, for example, ERISA for employee benefit plans, state insurance law for insurance products; (4) the powers and jurisdiction of applicable regulators, for example, the Commission, self-regulatory organizations and states, enforcement versus rulemaking; and (5) the regulation of issuers and intermediaries, for example, mutual fund disclosure and broker sales practices. In each case, these factors turn on issues other than the scope— who should have a fiduciary duty—and substance—what should that duty require—of the fiduciary duty