WASHINGTON BUREAU — The U.S. Securities and Exchange Commission (SEC) is reassigning examiners to speed up the process of writing a uniform fiduciary standard regulation, a lawmaker says.

Rep. Spencer Bachus, R-Ala., chairman of the House Financial Services Committee, talks about SEC moves to recall and reassign examiners in preparation for fiduciary standard regulation drafting in a letter to the SEC.

SEC Chairman Mary Schapiro plans to have the SEC begin work soon on writing and considering the rules needed to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act uniform fiduciary standard provision, Bachus says.

Bachus is blasting the reassignments. Instead of moving quickly on the fiduciary standard provision, the SEC should use its limited resources to complete work on “mandatory Dodd-Frank rulemakings,” Bachus writes in the letter.

A fiduciary is someone with a legal obligation to put the customers’ interests first.

Traditionally, a fiduciary standard has applied to investment advisors. A suitability standard – which requires the seller to verify that a product suits the buyer’s needs – applies to broker-dealers and their representatives, including many life insurance agents who have the licenses needed to sell variable annuities and variable life insurance.

Section 913 of the Dodd-Frank Act appears to give the SEC the authority to write a regulation that would create a uniform fiduciary standard -a fiduciary standard that would apply to broker-dealers as well as to investment advisors.

The Dodd-Frank Act requires the SEC to study the need for a uniform fiduciary standard before writing new fiduciary standard regulations.

“The SEC’s apparent plan is to push forward [on Section 913] by recalling examiners and reassigning them to write optional rules, when the SEC has yet to provide Congress with empirical data and economic analysis to justify these rulemakings,” Bachus says.

The Dodd-Frank Act “authorizes, but does not require, the SEC to promulgate rules that would apply the same standards to broker-dealers as to investment advisors,” Bachus says.

“The lack of a harmonized standard neither caused nor contributed to the financial crisis,” Bachus says. “While Dodd-Frank [Section] 913 is clear, it is my expectation that if the SEC acts to implement the provision, it should not impose in any formulation the Investment Adviser Act’s standard of care on broker-dealers.”

Any SEC action on standard-of-care matters is premature until the SEC can demonstrate that investors are being harmed by the current regulatory standards and that harmonization would enhance consumer protection, Bachus says.

“If the SEC decides to issue a proposal to implement [Section] 913, despite no statutory deadline to do so, it must act carefully and comprehensively to avoid disrupting an investor’s chosen relationship with his or her investment professional,” Bachus says.

Other Section 913 coverage from National Underwriter Life & Health: