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February 22, 2011 at 10:57 AM
On February 10, the Committee for the Fiduciary Standard and the New York Law School finally held their weather-delayed forum on the current state of the pending reregulation of brokers and RIAs. The panel featured an impressive lineup of distinguished and thoughtful academics, lawyers, regulators, and industry leaders who expressed a broad range of insightful views and predictions of the probable final outcome.
(See a video here of AdvisorOne's Kate McBride interviewing forum keynoter Tom Bradley of TD Ameritrade.)
Yet to my mind, the most valuable parts of the nearly two-hour discussion provided a more clear view of where we are today, which has greater implications for when the rereg might actually be implemented, than it did of forecasting what those new regs might look like. The current situation was perhaps most succinctly captured by Michael Koffler, who’s the partner in charge of the financial services group at Sutherland Asbill & Brennan in NYC.
Mr. Koffler focused on the political issues involved in reregulating brokers, observing that so far, “everybody punted.” The Congress sidestepped the issue in Dodd-Frank, passing the buck to the SEC. The Commission, in turn, handed off the problem to its staff, and then further distanced itself from even the implication of taking a position by stating on the covers of both key Dodd-Frank mandated studies (on a uniform fiduciary duty and the regulation of RIAs): “This is a study by the Staff of the U.S. Securities and Exchange Commission. The Commission has expressed no view regarding the analysis, findings, or conclusions contained herein.”
Then, not to be outdone, the SEC staff provided very few concrete recommendations in either study, rather offering a thorough analysis of the issues involved and concluding that the SEC really should something about all this, or as Koffler put it: “These are the things you should look at, you figure it out.”
