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November 25, 2014 at 09:08 AM
Among the top Dodd-Frank Act rulemakings that the Securities and Exchange Commission will focus on in fiscal 2015 are evaluating recommendations from a staff report to consider a uniform fiduciary standard for investment advisors and broker-dealers as well as finding ways to harmonize rules for advisors and brokers, the agency said in its just-released financial report for fiscal 2014.
SEC Chairwoman Mary Jo White said Nov. 10 that she would provide more “clarity” as to her position on a uniform fiduciary rule in the “short term,” despite the fact that the agency has not yet decided “whether to do something or what to do” regarding such a rulemaking.
White declined to clarify to reporters at the Securities Industry and Financial Markets Association annual conference in New York how soon her opinions on a fiduciary rule would come, stating only that deciding whether to use the authority given to the SEC by the Dodd-Frank Act to put brokers under a fiduciary mandate is “an issue that I’ve been focused on since I arrived, and certainly in this last fiscal year.”
However, industry officials say that the two SEC divisions with primary responsibility for crafting a fiduciary rule, Investment Management and Trading and Markets, have “separately” submitted their recommendations to White regarding a fiduciary rulemaking, as well as their alternatives.
White told members of the Senate Banking Committee in September that she had 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.
White noted at the SIFMA event the “very diverse views” at the commission that have delayed decision making on such a rule. The “inquiry as to what to do” regarding such a rule “doesn’t end with saying, ‘Let’s have a uniform fiduciary duty,’” as there are “a lot of different things that can mean,” White said.
Added White: “Care needs to be taken to ensure we’re not harming investors by driving away service providers in the brokerage space.”
While White said that she’s “very committed” to a fiduciary rule and that it’s a “very high priority,” it’s a “quite complex issue,” particularly “in some people’s minds [as it pertains to] the ‘whether’ question, but certainly the ‘how-to’ question.”
Marilyn Mohrmann-Gillis, managing director of public policy for the Certified Financial Planner Board of Standards, told our sister site, ThinkAdvisor, that the SEC’s “commitment to consider a fiduciary rulemaking” next year hopefully “signals that after five years since Dodd-Frank, the Commission will propose and adopt a uniform fiduciary rule that, consistent with Dodd-Frank, is no less stringent than the standard currently in place under the [Investment] Advisers Act [of 1940].”
