House Financial Services Committee Chairwoman Maxine Waters, D-Calif., wants to block the Securities and Exchange Commission from enforcing Regulation Best Interest.

Waters offered an amendment to the Financial Services and General Government Appropriations Act of 2020, H.R. 3351, to prohibit the SEC from using funds to enforce Reg BI.

The House Rules Committee voted late Monday evening to accept Waters' amendment for House floor consideration to H.R. 3351. Waters' amendment may now be taken up on the House floor as soon as Wednesday.

Reg BI was approved by the SEC on  June 5.

Her amendment, No. 78, to the bill, prohibits the SEC from "implementing, administering, enforcing or publicizing the final rules and interpretations" of Reg BI, "The Broker-Dealer Standard of Conduct."

The Insured Retirement Institute said it opposes Waters' amendment, stating that Reg BI "should move forward and be given time to work. The just-approved regulation will offer a substantial enhancement to investor protections over current law."

IRI argued that the new requirements on the broker-dealer industry "are considerable and the existing enforcement mechanisms applicable to Reg BI are rigorous." Reg BI, the annuity group said, "and parallel efforts at the National Association of Insurance Commissioners offer an opportunity for regulatory harmonization. This is particularly important as a number of states pursue standard of conduct regulations that threaten to impose a patchwork of confusing, conflicting requirements that may harm consumers' ability to obtain services to help them reach their financial goals."

Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association, added that "Reg BI is the most comprehensive enhancement of standard of conduct rules governing broker-dealers since the enactment of the Securities Exchange Act of 1934.  The rule materially and unalterably raises that standard consistent with Section 913 of the Dodd-Frank Act."

As promulgated, Bentsen said, brokers must be compliant by June 30, 2020. "It makes no sense to halt the orderly implementation of this important new set of regulations that would provide strong investor and consumer protections for forty-three million households."

A supporter of the now-defunct Labor Department fiduciary rule, Waters told reporters on March 6 that "we have to be concerned about best interests of our consumers and our seniors in particular. When you have investment advisors who are not acting in [consumers'] best interest, but are acting in their own best interest, it does not bode well for our senior investors in particular."

"So we are going to continue to pay attention to that," the congresswoman explained. "I don't know what the SEC has decided about what their role should be in this [fiduciary realm], but it's of interest to us."

The House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets, chaired by Rep. Carolyn Maloney, D-N.Y., held a March 14 hearing on Reg BI.

Waters was among 35 House Democrats who complained to SEC Chairman Jay Clayton late last year that the agency's Regulation Best Interest — part of the securities regulator's much-anticipated advice standards package — was not a true fiduciary standard.