Steve Luparello, director of the Securities and Exchange Commission’s Division of Trading and Markets, said Monday that the issue of whether to craft a fiduciary rule for brokers is “not so much a policy challenge as an implementation challenge,” and that while deciding whether to move forward on a fiduciary rule is on the agency’s agenda this year, “being on the agenda and getting it done are two different things.”
Luparello, who made his comments during a panel discussion at the Financial Industry Regulatory Authority’s annual conference in Washington, noted after being asked by FINRA CEO Richard Ketchum where the agency’s debate on the “the F word” currently stands, the lack of “coalescence of thought” among the SEC commissioners on how to move forward with a rulemaking.
However, Luparello added that the “fiduciary issue will stay on the commission’s agenda until it’s solved.”
Ketchum noted that he sees the main stumbling blocks to the SEC deciding on a rule proposal being the “interpretive laws” as well as the “concern with litigation.” But Ketchum said he sees an “overwhelming cultural benefit” for firms to build a compliance culture around “what’s in the best interest of the investor.”
Said Ketchum: “For some time I’ve said that we need to get there [to adopting a fiduciary rule], but you have to describe what that means to existing business models today. There’s a good deal of debate on what the impact is.”