SEC Fiduciary Rule ‘Major Focus’

In approaching this issue, the subcommittee says that the SEC’s goal “should be to eliminate the regulatory gap that allows broker-dealers to offer investment advice without being subject to the same fiduciary duty as other investment advisors but not to eliminate the ability of broker-dealers to offer transaction-specific advice compensated through transaction-based payments.”

Barbara Roper, director of consumer protection for the Consumer Federation of America, who chairs the SEC’s Investor as Purchaser Subcommittee that issued the proposal, told IA that the subcommittee’s hope was that “by weighing in early in the [fiduciary rulemaking] process, we can help to shape the form that commission rulemaking takes.”

In reaction to White’s comments, Roper said that the subcommittee “recognizes that the commission has a very full agenda of mandated rules under both Dodd-Frank and the JOBS Act, so discretionary rules have to fight for their share of a very limited bandwidth.”

The subcommittee “appreciates that Chair White views this issue as a priority and hopes that the commission can move forward with a strong, pro-investor rule in the not-too-distant future,” Roper added.

The subcommittee’s proposal was scheduled to come up for a vote at the Investor Advisor Committee’s mid-October meeting, but that was postponed because of the government shutdown. Roper said that “assuming that [the proposal] is eventually adopted by the full committee, perhaps our recommendation can help to provide further support for commission action.”