Securities and Exchange Commission Chairwoman Mary Jo White said in September that she has asked the SEC to place a “high priority” on its fiduciary rulemaking options list, and that the regulator continues to give “serious consideration” to input received from stakeholders regarding a fiduciary rulemaking.
However, White said several times during her testimony before the Senate Banking Committee at a hearing titled “Wall Street Reform: Assessing and Enhancing the Financial Regulatory System” that the SEC is “very focused on our mandated rulemakings under Dodd-Frank” and the Jumpstart Our Business Startups (JOBS) Act.
White has said that the agency will make a “threshold decision” this year on whether, and how, to move forward with a uniform fiduciary standard rule for brokers and advisors. Such a rule is not mandated by Dodd-Frank.
Said White in her Sept. 9 testimony: Section 913 of Dodd-Frank granted the commission “broad authority” to impose a uniform standard of conduct for broker-dealers and investment advisors when providing personalized investment advice, and “the question of whether and, if so, how to use this authority is very important to investors and the commission.”
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But the former deputy director of the agency’s Investment Management Division, Robert Plaze, stated later that month that a uniform fiduciary standard for brokers and advisors “is not going to work,” and that such a rule would end up haunting the profession. (See sidebar, “SEC’s Uniform Fiduciary Rule Could ‘Haunt’ Advisors.”)
White also said that commission staffers provide “regulatory expertise” to the DOL as it considers potential changes to the definition of fiduciary under the Employee Retirement Income Security Act. Labor has pushed release of its redraft to January.
The SEC is focusing the “balance of this year” on completing rulemakings under Title VII of Dodd-Frank, which requires creating a framework for the regulation of swap markets, as well as rules regarding executive compensation, White told the lawmakers.
Indeed, Sen. Jack Reed, D-R.I., noted the 18 remaining rules that the agency must complete under Dodd-Frank related to swaps and derivatives, and asked White if she could ensure the SEC rules in this area would be completed soon. White responded: “I can assure you of that.”
White noted in her prepared remarks that while the SEC has made “significant progress” in implementing mandated rules under Dodd-Frank and the JOBS Act, “more remains to be done … and we must continue our work with intensity.” The commission, White said, has proposed or adopted rules with respect to approximately 90% of all of the provisions of the Dodd-Frank Act that mandate commission rulemaking.