WASHINGTON BUREAU — The House Financial Services Committee will wait until Oct. 27 to mark up a group of financial regulatory system reform bills.

The bills involved are H.R. 2609, the Federal Insurance Office Act of 2009; H.R. 3817, the Investor Protection Act; H.R. 3818, the Private Fund Investment Advisers Registration Act of 2009; and the Accountability and Transparency in Rating Agencies Act draft.

Committee leaders postponed the “markup,” or revising, of the bills at the request of Republicans committee members.

Agent groups have been especially concerned about provisions in the IPA bill that would try to “harmonize” treatment of broker-dealers and investment advisors that are collecting fees, by requiring both to meet a fiduciary standard when selling products to consumers, meaning that they would both have to act “solely” in the interest . Traditionally, broker-dealers and their sales representatives have simply had to verify that the products sold to consumers are suitable for those consumers.

The House Financial Services Committee has tried to address the concerns of agent groups about the broker-dealer fiduciary standard in the IPA bill by developing a “manager’s amendment” stating “that investment advice subject to a fiduciary duty is provided on a personalized basis.”

The draft amendment would expand a provision governing commission-based sales to include other standardized compensation systems, according to the committee staff.

“The SEC is further authorized to facilitate the disclosure of any material conflicts of BDs and IAs in their disclosures to retail customers,” according to an amendment draft summary obtained by National Underwriter. “The SEC would further have the authority not only to prohibit but also restrict certain practices, conflicts and compensation schemes.”

Additionally, the manager’s amendment would ensure “that the standard of conduct for all BDs and IAs providing personalized investment advice will be at least as high as the current standard prevailing today for IAs,” according to the draft amendment summary.

“Harmonization of enforcement of the standard of conduct is amended in both the Securities Exchange Act and Investment Advisers Act,” the summary states.

The National Association of Insurance and Financial Advisors, Falls Church, Va., still has “grave concern” that the bill, which would set new standards for the sale of investment products by agents, would not provide adequate protection for agents who offer a limited basket of products to their clients.

“We continue to advocate for clear and definitive language that says ‘anyone who offers a limited basket of products to their clients will not be in violation of the standard,’” NAIFA President Thomas Currey says in a statement.

“It is simply impossible to be knowledgeable of the universe of products available and then make a recommendation to a client based on that universe,” Currey says.

The proposed IPA amendment ignores “the contractual relationships that broker-dealers have with product manufacturers,” Currey adds. “We understand that some argue that this standard will be interpreted to provide that safe harbor, but we continue to advocate for clear language to achieve this reasonable safe harbor.”

NAIFA also remains concerned that the revised bill would leave the door open for the SEC to restrict forms of compensation that are deemed contrary to the public’s interest, Currey says.

“We believe that what is in the public’s interest is that middle- and lower-income investors continue to have access to professional financial services,” Currey says. “These are services that are typically provided by heavily regulated registered representatives of broker-dealers who are compensated by commission–only after they have performed an extensive suitability analysis and then made a recommendation on which product or products will best meet the investor’s financial objectives.”