It's "ridiculous" that the rulemaking is taking so long, lawmakers said.

David Grim, director of the Securities and Exchange Commission’s Division of Investment Management, told House lawmakers Friday that while the IM division is busy developing a uniform fiduciary rule for advisors and brokers, he couldn’t say when such a plan would go before the Commission.

SEC Chairwoman Mary Jo White directed the IM Division as well as the Division of Trading and Markets in March to prepare a fiduciary recommendation. But Grim told members of the House Financial Services Capital Markets Subcommittee that such a recommendation is still not ready.

Lawmakers on the subcommittee, including its chairman, Rep. Scott Garrett, R-N.J., told Grim that it was “ridiculous” that an SEC fiduciary rulemaking was taking so long.

When asked the “timetable” for when SEC staff would deliver a fiduciary plan to the Commission, Grim responded: “Our direction has been to develop a recommendation, and that’s what we’re doing,” adding that “it would be up to the Commission to vote on” a fiduciary rule.  

Said Grim to the lawmakers: “The issue is a complicated one that has been contemplated in prior years without a rule being proposed, and whether a rule is ultimately proposed and adopted depends on further analysis and action by the full Commission.”

As to when a recommendation would go to the commissioners and White: “It will go there as soon as it’s ready,” Grim said.

Rep. David Scott, D-Georgia, stated that the Department of Labor “is clearly out of bounds” by moving forward with its own fiduciary rulemaking under the Employee Retirement Income Security Act.  

When queried on whether the DOL should wait for the SEC to act on its own fiduciary rulemaking in order to mitigate conflicting rules, Grim responded that DOL and SEC “have different mandates,” and that “it’s up to DOL what to do with ERISA.”

That being said, Grim said that the SEC is aware that ERISA and the Investment Adviser Act “already have differing approaches to fiduciary [duty], so that’s something that has to be considered” as the SEC drafts its rule.

Phyllis Borzi, assistant secretary of Labor for DOL’s Employee Benefits Security Administration, the main architect of DOL’s fiduciary rule, stated at a recent retirement event that DOL is still wading through the comment letters that poured in during the plan’s six-month comment period, but that she expects a final rule to be out in the first half of 2016.

Labor Secretary Thomas Perez was given an Oct. 21 deadline by House GOP lawmakers to tell them how DOL will make “substantial changes” to “shortcomings” in its fiduciary plan. The lawmakers also asked Perez to allow stakeholders to view those changes before issuing a final rule. Perez has stated that a final rule would be issued after the comment period expired, which occurred on Sept. 24.

But when asked by ThinkAdvisor at an event in New York Thursday if DOL had responded to the lawmakers’ request, Perez stated: the DOL is “still reviewing comments” and to announce anything before that is completed would be “irresponsible.”

– Bernice Napach contributed reporting.

— Check out DOL Clears Way for Impact Investing in Retirement Plans on ThinkAdvisor.