SEC Chairman Jay Clayton testifies during a Senate Banking Committee hearing in 2018. Photo: Tom Williams/CQ Roll Call via Getty Images

The SEC has passed Regulation Best Interest, a new rule requiring stockbrokers and financial advisers to act in the best interest of their clients.

Yes, but: There are some caveats. The rule does not require brokers to recommend the lowest-cost mutual funds or other types of products, something the financial industry opposed. Critics also are wary of the lack of enforcement mechanisms.

  • Reactions were incredibly mixed, with even SEC officials delivering strongly worded rebukes of the decision.

What they're saying:

  • SEC chairman Jay Clayton: "Regulation Best Interest will substantially enhance the broker-dealer standard of conduct."
  • SEC commissioner Robert Jackson, the lone vote against the proposal in a 3-1 decision: "Regulation Best Interest lowers the bar we set in last year's proposal." It's a "weak mix of measures" that does not even define the term best interest.
  • Investment Company Institute president and CEO Paul Schott Stevens: "Regulation Best Interest will better serve investor interests by ensuring investors are afforded strong protections when they receive recommendations from broker-dealers."
  • Christine Lazaro, president of Public Investors Arbitration Bar Association: "With the new rule, investors are left believing that their brokers will do what is best for them, when in fact, their brokers may still be influenced by insidious conflicts of interest."
  • John Lukanski, a partner at law firm Reed Smith, told Financial Planning: "My overall sense is that there is this promise of clarity, but in reality we are going to get a bunch of chaos."

Go deeper: Financial advisers may be forced to look out for clients again

Go deeper

Louisiana braces for 3rd hurricane in 2 months as Zeta closes in

The probable path of Zeta, per the National Hurricane Center. Photo: NHC/NOAA

Zeta strengthened into a hurricane again early Wednesday and was on track to make landfall in southeastern Louisiana by the afternoon, per the National Hurricane Center.

The state of play: Louisiana Gov. John Bel Edwards (D) requested a pre-landfall Federal Declaration of Emergency in a letter to President Trump on Tuesday.

Updated 2 hours ago - Politics & Policy

Unrest in Philadelphia after fatal police shooting of Black man

Demonstrators rally on Tuesday near the location where Walter Wallace was killed by two police officers in Philadelphia, Pennsylvania. Photo: Mark Makela/Getty Images

The Pennsylvania National Guard was mobilized Tuesday during a tense second night of protests in Philadelphia over the fatal police shooting of Walter Wallace, a 27-year-old Black man.

Driving the news: Philadelphia Mayor Jim Kenney (D) and Police Commissioner Danielle Outlaw said in a joint statement a "full investigation" would be launched to answer questions that arose from video that captured part of Monday's incident.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Politics: Obama: Trump is "jealous of COVID's media coverage."
  2. Health: Hospitals face a crush.
  3. Business: Winter threat spurs new surge of startup activity.
  4. Media: Pandemic causes TV providers to lose the most subscribers ever.
  5. World: Putin mandates face masks.