investment advisory subject to us if you share a duty i am left here she falls within a statutory exception the only exception available to procreate the worries requiring that any advice they provide be solely incidental to their brokerage business and without special compensation for that by this exception tracked the distinction between broker dealers and investment advisors at the time that those distinctions have since collapsed and both groups  has questioned article three standing once that c c determined that at least sound broker dealers were providing more than incidental personalized investment advice the f c c was required to take regulatory action right well your honor we disagree that the f c c could have taken no action our position is that once there was a predicate factual determination that burger dealers were providing the type of personalized investment advice that is no longer it's only incidental to their engages and providing advice about the value or advise ability of and investing in securities and the exception is very narrow for broker dealers it is not a wholesale exception it provides that the exception applies to any broker dealer whose performance of advisory services is sold the incidental to the conduct of his business as a broker or a dealer if congress had intended to creating one minute left thank you if congress had intended to create a wholesale exemption for broker dealers it could have done so statutory framework that applies to investment advice which is both of that frank act and that either that one series of predicates signing of advisory services that falls outside of the exception there are really only two options for the f c c either regulate that advice allows for differential treatment of some aspects of the broker dealer business like receiving commissions or being able to sell proprietary products and not having a duty to continually monitor but those the two options the use of the word may does not here are you arguing that in light of the language that you cited from the investment advisors yes c c should've adopted the regulations as you argue it should have irrespective of whether dodd frank has ever even been passed your honor our position is that once the f c c made a finding of the type of services that were being provided and it was clear that those services are again let me just go back to make really clear what my question is is your position that the f c c should have adopted the regulations as you proposed that you believe that they should have been by me given the state of the facts and given the state of the world you're saying that dodd frank basically then has nothing to do what are their vision that can hear you're basically saying that even that done frank had never been passed the same arguments or made you w we do think not frank is material to this case i think our our position is that the advisory that imposes an independent obligation on the commission to impose if you share a duty and that the dots rank i can reinforces that obligation rather than diminishes it as he sees position is that that dodd frank use of the term may essentially gives that p c discretion to do whatever it wants with respect to the standard of conduct that it imposes but that frank act must be read in conjunction well your honor with respect to this would you share a duty there is only one outcome but there are other aspects of section one hundred and eighteen dollars that would allow for differential treatment as against advising that standard and that is the purpose of the word may what regulatory approach is to consider and that congress directed that c c to consider only those regulatory approaches it was the approach of imposing that pfizer's act obligations wholesale or imposing the one  standard or or recommending to congress to repeal the foley incidental exception altogether every single one of those options would require imposing the fiduciary duty on personal lives investment advice but other aspects of the broker dealer business be regulated differently what this shows is that congress cared about this or fiduciary duty but did leave discretion to the f c c to figure out how to regulate other aspects of the broker dealer business model and it's important to nationwide it is true as your honour's questions have brought out that congress used the word it also used the word shall and so the statutory interpretation question in this case is what to make of those the use of those words and i think this a issue of statutory interpretation that can be resolved by resort to the plain text in two thousand and ten congress legislated this against a set of dual overlapping and confusing regulatory regimes who distinctions have become obsolete congress did in our view give the agency discretion and so we are willing to grant the premise of the f c c is argument that the f c c could have done nothing but the best way to read the statute is that congress commanded it if the f c c chose to write a regulation that congress set of lore and that was that the f c c had to harmonize the two regimes to create the same standard of conduct to govern the people who did the same thing flexibility to the agency to do more or other actions if it so chose but the agency decided that it was better than congress and it ultimately adopted a congress contrary policy choice doubling down on the existing regulatory confusion so as is said i think the plain text of the statute results of this question in the st place to look is the difference between the language  matter what will be f c c promulgated and what that rule may provide and if you look in the entire united states code you will see the authorizations were promulgated rules as a substantive matter use words like promulgated and provided they do not use words like commence a ruling which refers to the initiation of a process not it does not specify the result of this are about process they specify that because you can see had to do a study it gave the agency only six months to do that study and then it instructed the agency that it's due to chose after doing that study it could commence a process that will at a minimum have to provide in congress could not have been much clearer in the senate means you have one more minute it's said that the standards of conduct shall be the same for broker dealers and investment advisors the agency does not even fiduciary if that were the alternative but as opposed to the status quo i don't really understand how imposing more requirements on your competitors would harm you i just park i do agree that bass lines are important here and i think it's important to emphasize that our theory is that we have standing when the baseline is the status quo ant that rule causes us competitive injury because it further exacerbates confusion about the applicable regulatory standards and makes it more difficult for consumers to differentiate between financial planners  prevalent in the market place and so what the regulation does relative to the status quo not relative to a fiduciary rule is is harms our ability to compete compete based on their mainly main selling proposition which is that we are held to a high standard and additionally x y planning network which is a network of financial planners is hard because our business model depends on financial planners having the incentive to register for have that's the correct characterization to work and i would just say that that theory of standing is not unusual in the competitor standing arena because regulations often do different things some of which create burdens and some of which create create benefits we don't have to show that that and the thing the regulation does is it's good for our competitors and bad for us the relevant question is have we identified an injury as a result of competing in the same marketplace that is caused by the regulation that we're challenging relative to the status quo ante and we have done so under well established standards of competitors and if the court has no further morning and may please the court by jeff berger of the securities and exchange commission regulation best interest in hanson is the standard of conduct that broker dealers must provide to recal customers when making a recommendation as part of their business affecting securities transactions and in adopting regulations best interest the commission balance to related objectives st protecting investors by improving the quality of recommendations and reducing the risk of harm from conflict pervert preserving investors ability to choose among firms that offer different services in different piece structures now i want to get to the merits of the the authorities point but i do think i need to go into standing  but my understanding was that they were saying that statutory language in the abstract could have allowed the f c c to choose between a fiduciary standard or nothing but then as the regulatory process played out it would have been arbitrary or capricious to make the st choice meaning to choose nothing i mean i don't understand that you're not your understanding of what their argument made maybe i'm misconstru reading of the statute is that the committee has no obligation to do anything that goes the discretionary language of the statute so if the court were to strike down regulation best interest and this goes back to the commission to decide what to do next there is no mandate from congress that it has to act and that's a major addressability problem because it's going to revert to again a student know any regime that is less protective of investor interest meaning less likely to really raise the harms they're complaining about  will get to their homes in a nd then what regulation best interest there's also a causation issue here because in their declarations what the petitions are citing is an existing harm and then nothing more than an assumption at the h continue the regulation best interest is imposing new obligations and new legal exposure on broker dealers in order to protect investors so there's a separate causation issue and then they also have frank section nine hundred and thirteen congress showed that it knew how to mandate action using the word shall when it wanted to and it does break more broadly congress absolutely knew how to use the word shall there over one hundred dollars mandatory rule making about what the f c c could do hint hint but we're not going to make you do it but be awfully nice if you did it but if you know well whatever i mean is that added that the big heavy but optional hint no i think there's two answers to  dealer exclusion as you heard a lot about broker dealer exclusion from state you have to remember congress didn't touch the broker dealer exclusionist part of done break so putting nine hundred and thirteen dollars g in there then preserves it the commission had gone down to uniform finishes stand around with get some insulation from a challenge that the commission by doing so would have been violating the particular exclusion or somehow acting contrary to the advisors act so there it is the action would have been the notion that just a follow up is that if the study had recommended against that you know parents answered and if he had decided nevertheless to go with it g e would have prevented any successful litigation the broken deal or model so even though the entire language of the statute and whether the commission house acts touched in terms of may if it goes down that road there are certain shelves in there such as that relating to commission archives very products senate required the commission to commence a rule making within a certain amount of time i believe it was two years what happened in the final learning of nine hundred and thirteen as congress changed shall to may and because there is no longer a mandatory rule making  which is that ultimately the petitioners really are actually if you're into the tax they're ignoring the tax and they're asking this court to conclude that congress have an unwritten purpose to effectively collapse the broker dealer and investment advisor markets but it simply doesn't make sense that congress or the commission to study all these different potential regulatory approach and all these different issues x factor into those regular twenty approaches if the commission had only one choice which is to impose a uniform as a matter of statute therefore the correct comparison is between the agency's action or inaction and the statutory mandate not the existing status quo which is to satisfy the statute that we have also million dollars from conflicted advice by broker dealers and mutual and the mutual fund market alone we think that the harm is much higher but even if there is some dispute about the magnitude the existence of the harm is not disputed and the  incidental exception or modify it if it's not have to congress did not need to amend the statute to cover personalized investment advice by broker dealers because the statute already covered that subject to the so incidental exception to the contrary congress would have needed to amend the statute to act as he sees conclusion that the broker dealer exception covers any advice that is reasonably related to brokerage but words solely incidental do not mean reasonably related to the extent that it's regulation rested on an interpretation of law it had an obligation to ensure that that interpretation of the law is consistent with the the act that the that there's a reasonable interpretation of the act and the problem for the f c c is that it does not have a reasonable account of the key phrase in the broker dealer exception solely incidental this is the same exception to that last time the agency regulation to interpret the rule was vacated by the d c circuit for violating the plain text of the statute we think the departure from statutory text here is even more apparent because the regulation is premised on the interpretation under which  broker can hold itself out to the public as an investment advisor to provide frequent significant investment advice to its clients and generate substantial revenue from that advice as part of its business model no reasonable interpretation of the broker dealer exception to the investment advisors act support so that interpretation on which the regulation is premise could you just point to the very specific part of the record of the proposed rule that embodies thought and that's why i'm puzzled as to why you're challenging that in the context of this challenge to the regulation right obviously we could not challenge that on its own the agency faults us for not challenging that interpretation but one cannot challenge interpretive rule but but  the supreme court in this circuit has never held that an agency can promulgated a rule that rests entirely on an interpretation and insulate that interpretation from challenge what would otherwise be challengable simply by putting it in understanding of the exclusion when providing the recommendation is subject to the rule that is exactly our point the s c c s rule rests entirely on a certain understanding of which for us and activities the rule d would cover and in our view that understanding is wrong and so that is a form of species of our arbitrary and capricious rule making it's not the standard we're used to the idea that arbitrary and capricious rule making concern some kind of policy judgment but it is also thank you very much we will reserve decision but thanks for the argument was well argued