While optimism remains that the Securities and Exchange Commission will issue a rule putting brokers under a fiduciary mandate, the question being debated among industry and consumer officials is exactly when it will happen.

“The industry wants [a fiduciary rule] done, it’s the right thing to do. I still think it will happen,” Ken Bentsen, executive VP of public policy and advocacy at the Securities Industry and Financial Markets Association (SIFMA), told attendees at the Consumer Federation of America’s (CFA) financial services conference in Washington on Thursday.

“Unfortunately, the SEC staff is having to do a lot more work to get this rule out,” added Lawranne Stewart, deputy chief counsel in Rep. Barney Frank’s office at the House Financial Services Committee, who sat on a panel with Bentsen to discuss the future of securities regulation. “I think in the end they will” get a rule done, she said. “Hopefully we’ll see something soon.”

Barbara RoperHowever, Barbara Roper (left), director of investor protection for CFA, who was also a member of the panel, said she believed the SEC was “paralyzed” in moving forward on a fiduciary rule by a small portion of the broker-dealer community “dependent on variable annuity” sales who said “they would challenge a [fiduciary] rule proposal in court.” While there is “broad consensus” that this fiduciary rule should move forward, Roper said, “it seems almost impossible to make progress. We hope by sometime next year we’ll see something but don’t bet the farm.”

Roper added another stumbling block for the SEC is pressure from Capitol Hill on the agency to perform a more robust economic analysis on the rule. But Stewart added that she thinks an economic analysis on the fiduciary rule is an “easier” analysis to perform than on other rules.

David Tittsworth, executive director of the Investment Adviser Association in Washington, has predicted the SEC will release a fiduciary rule proposal in the first quarter of 2012.

Rep. Barney FrankRep. Barney Frank (left), D-Mass., ranking member on the House Financial Services Committee, told SEC Chairman Mary Schapiro in a May 31 letter that while Section 913 of Dodd-Frank gives the SEC the authority to establish a new fiduciary standard of care for broker-dealers, “the requirement that the new standard be ‘no less stringent’ … was not intended to encourage the SEC to impose the Investment Advisers Act [of 1940] standard on broker-dealers, but to ensure the new standard would not be a ‘watered down’ version of the investment advisors’ fiduciary standard.”

Stewart of Frank’s office said SEC staff was likely grappling with ’40 Act case law and conflicts around compensation. “We had to recognize when we did the [Dodd-Frank] statute that the BD industry has a different business model” than investment advisors.