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.