The Securities and Exchange Commission will let the Department of Labor move first in releasing its fiduciary redraft, which DOL recently said won’t come until next August, two prominent industry officials predicted Thursday.
“The SEC doesn’t want to go first” in releasing a fiduciary rule, Mary Wallace, senior legislative representative for AARP, said during a panel discussion on fiduciary duty at the Consumer Federation of America’s financial services conference in Washington.
Indeed, Mercer Bullard, founder of Fund Democracy and associate professor at the University of Mississippi School of Law, who sat on the panel with Wallace, told ThinkAdvisor before his comments that he believes Perez has decided to revisit the DOL’s reproposal “from the ground up” in order to gain industry support for the rule.
Wallace and Bullard’s predictions run counter to what a bill that passed the full House in late October would require the DOL to do, which is wait to repropose its rule until 60 days after the SEC issues its fiduciary proposal under Section 913 of the Dodd-Frank Act. The Senate Banking Committee, however, has “no interest” in taking up such legislation.
Labor Secretary Thomas Perez and his new deputy assistant secretary Judy Mares are “energized” about the DOL’s rule to amend the definition of fiduciary under the Employee Retirement Income Security Act, Wallace said. Perez has “been doing a lot of pushback” with congressional opponents of DOL’s reproposed rule, she said.
DOL’s rule will be a “stronger rule,” and it will “bolster” the SEC’s rule, Wallace told ThinkAdvisor. DOL is “also more prepared” to release its reproposal, she added.
Bullard agreed that the SEC would wait to release its fiduciary rule for brokers until after the DOL released its fiduciary redraft, so that DOL “could take the heat.”