The XY Planning Network will not pursue its challenge to the SEC’s Regulation Best Interest in the Supreme Court and plans instead to fight for a fiduciary standard at the state level.
In June, the U.S. Court of Appeals for the Second Circuit dismissed a lawsuit brought in September 2019 by XYPN — which had been combined with another suit filed by the attorneys general of seven states and the District of Columbia — challenging the SEC’s authority to implement Reg BI, whose compliance deadline was June 30.
Michael Kitces, co-founder of XYPN, said at the time that the fight was far from over: One option was to ask for a rehearing en banc with the Second Circuit to get all judges to review the ruling. Furthermore, XYPN and the attorneys general could have petitioned for a hearing before the Supreme Court, FA-IQ sister publication Ignites wrote in June.
But XPYN says it has opted not to appeal the ruling and instead will continue its fight for the fiduciary standard at the state level.
"As a membership organization with more than 1,300 advisors and RIAs in all 50 states, we recognize the challenges of uniformity in state fiduciary rulemaking," Kitces says in a statement. "Nonetheless, with the firms that manufacture and distribute products blocking effective Federal regulation, we believe the states represent the best path to advance fiduciary regulation of advice.”
XYPN also says that it has brought on industry lobbyist and fiduciary advocate Duane Thompson, president and founder of Potomac Strategies, to help the organization in its advocacy for a fiduciary standard with the states.
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